Recording sales, returns, and discounts taken LO P2
Prepare journal entries to record each of the following sales transactions of a merchandising company. The company uses a perpetual inventory system and the gross method.
Apr. 1 Sold merchandise for $3,800, with credit terms n/30; invoice dated April 1. The cost of the merchandise is $2,280.
Apr. 4 The customer in the April 1 sale returned $460 of merchandise for full credit. The merchandise, which had cost $276, is returned to inventory.
Apr. 8 Sold merchandise for $1,400, with credit terms of 1/10, n/30; invoice dated April 8. Cost of the merchandise is $980.
Apr. 11 Received payment for the amount due from the April 1 sale less the return on April 4.

We will record assets and expenses on the debit as they increase during the year and will record liabilities and capital on the credit side as they increase during the year or vice versa.

DEBIT CREDIT

April 01

Account Receivable $3,800

Sales $3,800

Apr - 01

Cost of Goods Sold $2,280

Merchandise $2,280

Apr - 04

Sales Return $460

Account Receivable $460

Apr - 04

Merchandise $276

Cost of Goods Sold $276

Apr - 08

Account Receivable $1,400

Sales $1,400

Apr - 08

Cost of Goods Sold $980

Merchandise $980

Apr - 11

Cash $3,340

Account Receivable $3,340