al entries to record each of the following sales transactions of a merchandising

Question

al entries to record each of the following sales transactions of a merchandising company. Assume a perpetual inventory system. Apr. 1 Sold merchandise for $6,200, granting the customer terms of 2/10, EOM; invoice dated April 1 Apr. 4 The customer in Apr. 11 Received payment for the amount due from the April 1 sale less the return on April 4. The cost of the merchandise is $3,720. the April 1 sale returned merchandise and received credit for $700. The merchandise, which had cost $420, is returned to inventory View transaction list Journal entry worksheet 2 3 4 Sold merchandise for $6,200, granting the customer terms of 2/10, EOM. Note: Enter debits before credits Date General Journal Debit Credit Apr. 1 Record entry Clear entry Vilew goneral Journal

Explanation / Answer

Journal Entries Sold merchandise for $6,200 granting the customer terms of 2/10 EOM invoice dated 1st April. => 2/10 EOM, means Take 2% discount if pay in 10 days, otherwise pay full amount at the END of the Month Date General Journal Debit Credit 01-Apr Accounts Receivable A/c                                    Dr $6,200                To Sales Account $6,200 (Being merchandise sold on credit terms of 2/10 EOM) Cost of Goods sold A/c                                       Dr $3,720                    To merchandise Inventory $3,720 (Being cost of the Merchandise sold has been reduced from Inventory) Customer returned merchandise sold on April 1 and received a credit of $700 Date General Journal Debit Credit 04-Apr Sales A/c                                                             Dr $700               To Accounts Receivable A/c $700 (Being Customer returned merchandise sold on April 1 and received a credit of $700) Merchandise Inventory A/c                               Dr $420            To Cost of Goods sold A/c $420 (Being cost of the Merchandise returned has been adjusted to Inventory) Received Payment for the amount due Date General Journal Debit Credit 11-Apr Bank / Cash A/c                                                Dr $5,390 Discount on Sales A/c                                       Dr $110                       To Accounts Receivable A/c $5,500 (Being balance amount received from the Customer after discount) (Since, the customer has made the payment within 10 days from the date of sale, he is eligible for 2% discount on the Credit amount) Discount Amount = 2% of Amount due ( $6,200 - $700) => 2% of $5,500 => $110

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