Question

Garfunkle Company had the following four transactions during January 2012:

January 3	Purchased 200 hair dryers from Hot Aire Corporation for $30 each, terms n/30.
January 5	Sold 50 hair dryers purchased on January 3 for $50 each, terms n/30.
January 15	Returned five of the hair dryers purchased on January 3 because they were defective.
January 22	A customer returned two hair dryers purchased on January 5 because they were defective.

Given the information above, with the perpetual inventory method, make the journal entries for all four transactions. Label by date.

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Answer 1

Journal Entries
Date	Particulars			Debit	Credit
3-Jan	Merchandise Inventory			$ 6,000.00
	To Accounts Payable				$ 6,000.00
	(200 units x $ 30)
5-Jan	Accounts Receivable			$ 2,500.00
	To Sales				$ 2,500.00
	(50 units x $ 50)
	Cost of Goods sold			$ 1,500.00
	To Merchandise Inventory				$ 1,500.00
	(50 units x $ 30)
15-Jan	Accounts Payable			$    150.00
	To Merchandise Inventory				$    150.00
	(5 units x $ 30)
22-Jan	Sales Return			$    100.00
	To Accounts Receivable				$    100.00
	(2 units x $ 50)
	Merchandise Inventory			$      60.00
	To Cost of Goods sold				$      60.00
	(2 units x $ 30)