Gift Shop uses a perpetual inventory system. Journalize the following transactions for Trudie's TrinketsGift Shop. Explanations are not required. (Record debits first, then credits. Exclude explanations from journal entries. Assume the company records sales at the net amount. Feb. 3 Purchased $3,100 of merchandise inventory on account under terms 3/10,n/EOM and FOB shipping poin.
Date Accounts Debit Credit
Feb. 3
7 Returned $400 of defective merchandise purchased on February 3.
Date Accounts Debit Credit
Feb. 7
9 Paid freight bill of $500 on February 3 purchase.
Date Accounts Debit Credit
Feb. 9
10 Sold merchandise inventory on account for $4,400. Payment terms were 3/15, n/30. These goods cost the company $2,200.
Begin by preparing the entry to journalize the sale portion of the transaction. Do not record the expense related tot he sale. We will do that in the following step.
Date Accounts Debit Credit
Feb. 10
Now journalize the expense related tot he February 10 sale — Cost of goods, $2,400.
Date Accounts Debit Credit
Feb. 10
12 Paid amount owed on credit purchase of February 3, less the return and the discount.
Date Accounts Debit Credit
Feb. 12
28 Received cash from February 10 customer in full settlement of their debt.
Date Accounts Debit Credit
Feb. 28