Following are the merchandising transactions for Dollar Store.

Exercise 4-9 Recording purchases, sales, returns, and shipping LO P1, P2

Following are the merchandising transactions for Dollar Store.

Nov.           1           Dollar Store purchases merchandise for $2,600 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 $250 of defective merchandise purchased on November 1, and paid for on November 5, for a cash refund.
            10           Dollar Store pays $130 cash for transportation costs for the November 1 purchase.
            13           Dollar Store sells merchandise for $2,808 with terms n/30. The cost of the merchandise is $1,404.
            16           Merchandise is returned to the Dollar Store from the November 13 transaction. The returned items are priced at $285 and cost $143; 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.

Explanation

Nov.           7:           Returned goods for cash. $250 × (100% – 2%) = $245.


Thank you!