Exercise 5-4

May 5

Accounts Receivable ....................................... 8,400

Sales ...........................................................

8,400

Sold merchandise on credit (600

x $14).

Cost of Goods Sold .......................................... 6,000

Merchandise Inventory .............................

6,000

To record cost of sale (600 x $10).

a.
May 7

Sales Returns and Allowances ....................... 2,800

Accounts Receivable ................................

2,800

Accepted a return from a customer (200 x

$14).

Merchandise Inventory .................................... 2,000

Cost of Goods Sold ..................................

2,000

Returned merchandise to inventory (200 x

$10).

b.
May 8

Sales Returns and Allowances ........................

Accounts Receivable .................................
Granted allowance for damaged
merchandise.

300
300

Exercise 5-4
c.
May 15 Sales Returns and Allowances ........................
Accounts Receivable .................................

92
92

Granted allowance for incorrect

merchandise.

15 Sales Returns and Allowances ........................

Accounts Receivable .................................

406
406

Accepted return from a customer (29 x $14).

15 Merchandise Inventory .....................................

Cost of Goods Sold ...................................

290
290

Returned merchandise to inventory (29 x $10).

Exercise 5-5
May 5

Merchandise Inventory .................................... 8,400

Accounts Payable .....................................

8,400

Purchased merchandise on credit (600 x

$14).

a.
May 7

Accounts Payable ............................................ 2,800

Merchandise Inventory .............................

2,800

Returned unwanted merchandise (200 x

$14).

b.
May 8

Accounts Payable ............................................

Merchandise Inventory .............................

300
300

To record allowance for damaged

merchandise.

c.
May 15 Accounts Payable ............................................
Merchandise Inventory .............................

92
92

To record allowance for wrong color.

May 15 Accounts Payable ............................................

Merchandise Inventory .............................
To record return of merchandise. (29 x $14).

406
406

Problem 5-1A
Aug. 1 Merchandise Inventory ..................................... 6,000
Accounts PayableAbilene .....................

6,000

Purchased goods on credit.

4 Accounts PayableAbilene .............................

Cash ............................................................

100
100

Paid freight for Abilene.

5 Accounts ReceivableLux .............................. 4,200

Sales............................................................

4,200

Sold goods on credit.

5 Cost of Goods Sold ........................................... 3,000

Merchandise Inventory ..............................

3,000

To record the cost of August 5 sale.

8 Merchandise Inventory ..................................... 5,540

Accounts PayableWelch ........................

5,540

Purchased goods on credit.

9 Delivery Expense ...............................................

Cash ............................................................

120
120

Paid shipping charges on August 5 sale.

10 Sales Returns and Allowances ........................

Accounts ReceivableLux .......................

700
700

Customer returned merchandise.

10 Merchandise Inventory .....................................

Cost of Goods Sold ...................................

500
500

Returned goods to inventory.

12 Accounts PayableWelch ...............................

Merchandise Inventory ..............................
Received a credit memorandum for
August 8 purchase.

800
800

Problem 5-1A
Aug. 15 Cash .................................................................... 3,430
Sales Discounts .................................................
70
Accounts ReceivableLux .......................

3,500

Collected receivable within 2% discount

period.

18 Accounts PayableWelch ............................... 4,740

Merchandise Inventory* ............................
Cash** .........................................................

45
4,695

Paid payable within discount period

* (1% x [$5,300 - $800])
**([100%-1%] x [$5,300 - $800]) + $240
shipping.

19 Accounts ReceivableTrax ............................. 3,600

Sales............................................................

3,600

Sold goods on credit.

19 Cost of Goods Sold ........................................... 2,500

Merchandise Inventory ..............................

2,500

To record cost of the August 19 sale.

22 Sales Returns and Allowances ........................

Accounts ReceivableTrax .....................

600
600

Issued credit memorandum.

29 Cash .................................................................... 2,970

Sales Discounts (1%) ........................................
30
Accounts ReceivableTrax .....................

3,000

Collected receivable within discount

period.

30 Accounts PayableAbilene ............................. 5,900

Cash ............................................................
Paid payable ($6,000 - $100); discount
period has expired.

5,900