Question

Sales Transactions Journalize the following merchandise transactions: a. Sold merchandise on account, $22,700 with terms 1/10,...

Sales Transactions

Journalize the following merchandise transactions:

a. Sold merchandise on account, $22,700 with terms 1/10, n/30. The cost of the merchandise sold was $13,620.

Sale Accounts Receivable
Sales
Cost Cost of Merchandise Sold
Merchandise Inventory

b. Received payment less the discount.

Cash
Accounts Receivable

c. Issued a credit memo for returned merchandise that was sold for $10,600 terms n/30. The cost of the merchandise returned was $6,360.

Refund Customer Refunds Payable
Accounts Receivable
Inventory Merchandise Inventory
Cash
Business   Accounting   
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Answer #1

Solution: Following are the required journal entries:

Sr. no. Particulars Debit($) Credit($)
(a) Accounts Receivable 22700
Sales 22700
Cost of Merchandise Sold 13620
Merchandise Inventory 13620
(b) Cash(22700-227) 22473
Sales Discount(22700*1%) 227
Accounts Receivable 22700
(c) Allowances for Sales Return 10600
Accounts Receivable 10600
Merchandise Inventory 6360
Cost of Merchandise Sold 6360

Note: For (b) we have assumed that the payment was made in 10 days in order to avail the discount.

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