Answer:
Dollar Store
Journal Entries:
Nov. 1 Debit Inventory $2,900
Credit Accounts Payable $2,900
To record the purchase of goods on terms of 2/5, n/30, FOB shipping point, invoice dated November 1.
Nov. 5 Debit Accounts Payable $2,900
Credit Cash $2,842
Credit Cash Discount $58
To record the payment for the goods, including discounts.
Nov. 7 Debit Cash $250
Credit Inventory $250
To record the return of goods for cash.
Nov. 10 Debit Freight-in $145
Credit Cash $145
To record payment for transportation of goods.
Nov. 13 Debit Accounts Receivable $3,132
Credit Sales Revenue $3,132
To record the sale of goods with terms n/30.
Debit Cost of goods sold $1,566
Credit Inventory $1,566
To record the cost of goods sold.
Nov. 16 Debit Sales Returns $270
Credit Accounts Receivable $270
To record the return of goods.
Debit Inventory $135
Credit Cost of goods sold $135
To record the cost of goods returned.
Explanation:
a) Data and Analysis:
Nov. 1 Inventory $2,900 Accounts Payable $2,900
on terms of 2/5, n/30, FOB shipping point, invoice dated November 1.
Nov. 5 Accounts Payable $2,900 Cash $2,842 Cash Discount $58
Nov. 7 Cash $250 Inventory $250
Nov. 10 Freight-in $145 Cash $145
Nov. 13 Accounts Receivable $3,132 Sales Revenue $3,132
with terms n/30
Cost of goods sold $1,566 Inventory $1,566
Nov. 16 Sales Returns $270 Accounts Receivable $270
Inventory $135 Cost of goods sold $135
