Question

Following are the merchandising transactions of Dollar Store.

Nov.		1		Dollar Store purchases merchandise for $2,300 on terms of 2/5, n/30, FOB shipping point, invoice dated November 1.
		5		Dollar Store pays cash for the November 1 purchase.
		7		Dollar Store discovers and returns $200 of defective merchandise purchased on November 1, and paid for on November 5, for a cash refund.
		10		Dollar Store pays $115 cash for transportation costs for the November 1 purchase.
		13		Dollar Store sells merchandise for $2,484 with terms n/30. The cost of the merchandise is $1,242.
		16		Merchandise is returned to the Dollar Store from the November 13 transaction. The returned items are priced at $290 and cost $145; the items were not damaged and were returned to inventory.

Journalize the above merchandising transactions for the Dollar Store assuming it uses a perpetual inventory system and the gross method.

Answer 1

Nov 01	Merchandise Inventory	2300
	Accounts Payable		2300
Nov 05	Accounts Payable	2300
	Merchandise Inventory		46	=2300*2%
	Cash		2254
Nov 07	Cash	196		=200*(1-2%)
	Merchandise Inventory		196
Nov 10	Merchandise Inventory	115
	Cash		115
Nov 13	Accounts Receivable	2484
	Sales		2484
Nov 13	Cost of goods sold	1242
	Merchandise Inventory		1242
Nov 16	Sales return and allowances	290
	Accounts Receivable		290
Nov 16	Merchandise Inventory	145
	Cost of goods sold		145