Question

Nov. 1 Dollar Store purchases merchandise for $1,600 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 $100 of defective merchandise purchased on November 1, and paid for on November 5, for a cash refund. 10 Dollar Store pays $80 cash for transportation costs for the November 1 purchase. 13 Dollar Store sells merchandise for $1,728 with terms n/30. The cost of the merchandise is $864. 16 Merchandise is returned to the Dollar Store from the November 13 transaction. The returned items are priced at $200 and cost $100; 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

Answer:

NOV 1

Inventory 1,600

Account Payable 1,600

Nov 5

Account Payable 1,600

Discount received  32

Cash 1,568

Nov 7

Cash 100

Inventory 100

Nov 10

Freight In 80

Cash 80

Nov 13

Account receivable 1,728

Sales Revenues 1,728

Nov 13

COGS 864

Inventory 864

Nov 16

Sales Revenue 200

Account receivable 200

Nov 16

Inventory 100

COGS 100

Explanation:

Answer 2

Answer:

NOV 1

Inventory 1,600

Account Payable 1,600

Nov 5

Account Payable 1,600

Discount received  32

Cash 1,568

Nov 7

Cash 100

Inventory 100

Nov 10

Freight In 80

Cash 80

Nov 13

Account receivable 1,728

Sales Revenues 1,728

Nov 13

COGS 864

Inventory 864

Nov 16

Sales Revenue 200

Account receivable 200

Nov 16

Inventory 100

COGS 100

Explanation:

The changes in inventory valuation must be done imediatly under perpetual inventory system.