College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570



College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

Record the following transactions for a perpetual inventory system in general journal form.

  1. a. Sold merchandise on account to Southridge Manufacturing, Inc., invoice no. 6910, $1,815.24. The cost of merchandise was $1,320.
  2. b. Issued credit memorandum no. 56 to Southridge Manufacturing, Inc., for merchandise returned, $622. The cost of the merchandise was $485.
  3. c. Bought merchandise on account from Michal’s Inc., invoice no. 1685, $850; terms 1/10, n/30; dated April 14; FOB Dallas, freight prepaid and added to the invoice, $65.00 (total $915).
  4. d. Received credit memorandum no. 219 from Michal’s Inc. for merchandise returned, $210.

To determine

Prepare journal entry to record the given transaction using perpetual inventory system.


Merchandise Inventory:

Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a trader, to be sold within a year. Merchandise Inventory is a current asset account which includes all the costs incurred to acquire merchandise, and process it further for sale.

Serial number Account Titles and explanation Post.Ref Debit ($) Credit ($)
a. Accounts receivable   1,815.24  
      Sales     1,815.24
  (To record the sale of merchandise to Company S, invoice no:6910)      
  Cost of goods sold   1,320.00  
      Merchandise inventory     1,320.00
  (To record the cost of  merchandise sold to Company S)      
b. Sales return and allowance   622.00  
       Accounts receivable, Company S     622...

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