Question

Recording sales, returns, and discounts taken LO P2 Prepare journal entries to record each of the following sales transactions of a merchandising company. The company uses a perpetual inventory system and the gross method.

Apr. 1 Sold merchandise for $3,000, with credit terms n/30: invoice dated April 1. The cost of the merchandise is $1800
Apr. 4 The customer in the April 1 sale returned $300 of merchandise for full credit. The merchandise, which had cost $180 ,is returned to inventory
Apr. 8 Sold merchandise for $1,000, with credit terms of 1/10, n/30: invoice dated April 8. Cost of the merchandise is $700
Apr. 11 Received payment for the amount due from the April 1 sale less the return on April 4.

Answer 1

Answer and Explanation:

The journal entries are shown below:

1. Account Receivable $3,000

To Sales $3,000

(Being sale is recorded)

2. Cost of Goods Sold $1,800

To Merchandise $1,800

(Being the cost of goods sold is recorded)

3. Sales Return $300

To Account Receivable $300

(Being sales return is recorded)

4. Merchandise $180

To Cost of Goods Sold $180

(being cost return is recorded)

5. Account Receivable $1,000

To Sales $1,000

(Being sale is recorded)

6. Cost of Goods Sold $700

To Merchandise $700

(Being the cost of goods sold is recorded)

7. Cash $2,700 ($3,000 - $300)

To Account Receivable $2,700

(Being payment receipt is recorded)