Question

Prepare the journal entries for each of the following:

June 5   Purchased $12,000 of inventory on account with terms 2/10,n/30, FOB Shipping Point.

June 7   Returned $2,000 of defective merchandise purchased on June 5.

June 8   Paid cash of $100 for the freight bill for the June 5 purchase.

June 10 Sold inventory on account for $8,000, terms 3/15,n/eom. The inventory cost $5,200.

June 12 The customer from June 10 returned $400 of merchandise. This merchandise cost the company $250.

June 15 Paid the amount owed for the June 5 purchase less the return of June 7.

June 22 Collected the amount due from the customer of June 10 less the return of June 12.

Answer 1

Journal entries

Date	account and explanation	Debit	Credit
June 5	Merchandise inventory	12000
	Account payable		12000
June 7	Account payable	2000
	Merchandise inventory		2000
June 8	Merchandise inventory	100
	Cash		100
June 10	Account receivable	8000
	Sales revenue		8000
	Cost of goods sold	5200
	Merchandise inventory		5200
June 12	Sales return and allowance	400
	Account receivable		400
	Merchandise inventory	250
	Cost of goods sold		250
June 15	Account payable	10000
	Cash (10000*98%)		9800
	Merchandise inventory		200
June 22	Cash (7600*97%)	7372
	Sales discount	228
	Account receivable (8000-400)		7600