Question

Prepare journal entries to record each of the following sales transactions of EcoMart Merchandising. EcoMart uses a perpetual inventory system and the gross method.

Oct.		1		Sold fair trade merchandise for $2,400, with credit terms n/30, invoice dated October 1. The cost of the merchandise is $1,350.
		6		The customer in the October 1 sale returned $240 of fair trade merchandise for full credit. The merchandise, which had cost $135, is returned to inventory.
		9		Sold recycled leather merchandise for $1,150, with credit terms of 1/10, n/30, invoice dated October 9. Cost of the merchandise is $810.
		11		Received payment for the amount due from the October 1 sale less the return on October 6.

Answer 1

Date	Account Titles	Debit	Credit
Oct-01	Accounts Receivable	$             2,400
	Sales Revenue		$              2,400
	(Sales made on account)
	Cost of Goods Sold	$             1,350
	Inventory		$              1,350
	(Cost of goods sold recorded)
Oct-06	Sales returns and allowances	$                240
	Accounts Receivable		$                  240
	(Inventory returned by customer)
	Inventory	$                135
	Cost of Goods sold		$                  135
	(Inventory added back)
Oct-09	Accounts Receivable	$             1,150
	Sales Revenue		$              1,150
	(Sales made on account)
	Cost of Goods Sold	$                810
	Inventory		$                  810
	(Cost of goods sold recorded)
Oct-11	Cash	$             2,160		=2400-240
	Accounts Receivable		$              2,160
	(Cash collected for Oct 1 sale)