Question

Journal Entries for Merchandise Transactions on Seller’s and Buyer’s Records—Periodic System

The following are selected transactions for Jefferson, Inc., during the month of April:

April 20 Sold and shipped on account to Lind Stores merchandise for $3,000, with terms of 1/10, n/30.
April 27 Lind Stores returned defective merchandise billed at $300 on April 20.
April 29 Received from Lind Stores a check for full settlement of the April 20 transaction.
Required
Prepare the necessary journal entries for (a) Jefferson, Inc., and (b) Lind Stores. Both companies use the periodic inventory system.

Answer 1

Journal entries are needed to record a sale, return, and payment in a periodic inventory system. Jefferson, Inc. and Lind Stores must update their accounts to accurately reflect these transactions, accounting for the discounts according to the payment terms.

Step-by-step explanation:

The question relates to recording journal entries for merchandise transactions in a periodic inventory system by both the seller and the buyer after a sale transaction, a return, and the receipt of a payment.

Journal Entries for Jefferson, Inc.

Journal Entries for Lind Stores

These entries track the transaction, return, and payment in the periodic inventory system while also accounting for any discounts available.