Question

Mark's Music is a store that buys and sells musical instruments and uses a perpetual inventory system. Transactions for the business are shown below: Nov.2 Purchased two electric guitars from Fender Supply Limited, on account, at a cost of $850 each, terms 1/10, n/60. 4 Made a cash sale of two keyboards for a total invoice price of $2,300. The cost of each keyboard was $700. 5 Received a credit from Western Acoustic Inc. for the return of an acoustic guitar, which was defective. The original invoice price was $425 and the guitar had been purchased on account. 7 One of the keyboards from the cash sale of Nov. 4 was returned to the store for a full cash refund because the customer was not satisfied with the instrument. 8 Purchased store supplies from a stationery store. The price of the supplies is $150. 10 Sold one Omega trumpet to the Toronto Regional Band, on account for an invoice price of $3.100. Terms are 1/10, n/60. The trumpet had cost Mark's Music $1,420. 10 Made a payment on account for the amount owing to Fender Supply Limited for the purchase of Nov. 2. 13 Purchased two saxophones from Yamaha Canada Inc. on account. The invoice price was $2,600 for each saxophone. Terms are 1/10,n/30. 16 Returned to Yamaha Canada Inc. one of the saxophones purchased on Nov. 13, as it was the wrong model. Received a credit from Yamaha for the full purchase price. 20 Received a cheque for the appropriate amount from the Toronto Regional Band for the purchase of Nov. 10. 22 Paid balance owing to Yamaha Canada Inc. Prepare the journal entries to record Mark's Music transactions assuming the company uses the earnings approach to recognize revenue. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.)

Answer 1

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.
Date	Account	Debit	Credit
Nov 2	Merchandise Inventory ($850*2)	$    1,700
	Accounts Payable		$    1,700
Nov 4	Cash	$    2,300
	Sales Revenue		$    2,300
	Cost of Goods Sold	$    1,400
	Merchandise Inventory		$    1,400
Nov 5	Accounts Payable	$        425
	Merchandise Inventory		$        425
Nov 7	Sales Return and Allowance	$    1,150
	Cash		$    1,150
	Merchandise Inventory	$        700
	Cost of Goods Sold		$        700
Nov 8	Store Supplies	$        150
	Cash		$        150
Nov 10	Accounts Receivable	$    3,100
	Sales Revenue		$    3,100
	Cost of Goods Sold	$    1,420
	Merchandise Inventory		$    1,420
Nov 10	Accounts Payable	$    1,700
	Merchandise Inventory ($1,700*1%)		$          17
	Cash		$    1,683
Nov 13	Merchandise Inventory ($2,600*2)	$    5,200
	Accounts Payable		$    5,200
Nov 16	Accounts Payable	$    2,600
	Merchandise Inventory ($2,600*1)		$    2,600
Nov 20	Cash ($3,100*1%)	$    3,069
	Sales Discount	$          31
	Accounts Receivable		$    3,100
Nov 22	Accounts Payable	$    2,600
	Merchandise Inventory ($2,600*1%)		$          26
	Cash		$    2,574