Final answer:
Journal entries for the retail store's transactions include recording the purchases of merchandise, shipping charges, returns, discounts from the payment of invoices, and allowances received for any discrepancies in the merchandise. The entries reflect the use of a perpetual inventory system and the gross method for recording purchases and discounts.
Step-by-step explanation:
Journal Entries for Transactions
To record the transactions for the retail store, you would need to make several journal entries to reflect the purchases, returns, allowances, and payments made. Here's a step-by-step explanation:
April 2: Purchased merchandise of $6,400.
Debit Merchandise Inventory $6,400
Credit Accounts Payable $6,400
April 3: Paid shipping charges of $300.
Debit Merchandise Inventory $300
Credit Cash $300
April 4: Returned merchandise worth $750.
Debit Accounts Payable $750
Credit Merchandise Inventory $750
April 17: Paid for April 2 purchase with discount.
Debit Accounts Payable $5,650
Credit Merchandise Inventory $130 (discount 2% of $6,400 - $750)
Credit Cash $5,520
April 18: Purchased merchandise of $12,100.
Debit Merchandise Inventory $12,100
Credit Accounts Payable $12,100
April 21: Received an allowance of $600.
Debit Accounts Payable $600
Credit Merchandise Inventory $600
April 28: Paid for April 18 purchase with discount and allowance.
Debit Accounts Payable $11,500
Credit Merchandise Inventory $115 (discount 1% of $12,100 - $600)
Credit Cash $11,385
Note that discounts are calculated after subtracting any returns or allowances from the purchase amount.