The following supplementary records summarize Tesla Company’s merchandising activities for year 2017 (it uses a perpetual inventory system). Record the summarized activities in the T-accounts below. Following are the merchandising transaction for dollar store. Nov. 1 Dollar store purchases merchandise for $2,200 on terms of 2/5, n/30, FOB shipping point, invoice date November 1. 5 dollar store pays cash for the November 1 purchase. 7 Dollar store discovers and returns $200 of defective merchandise purchased on November 5, for a cash refund. 10 Dollar store pays $110 cash for transportation costs for the November 1 purchase. 13 Dollar store sells merchandise for $2,376 with terms n/30. the cost of the merchandise is $1,188. 16 Merchandise is returned to the Dollar store from the November 13 transcation. The returned items are priced at $260 and cost $130: the items were not damaged and were returned to inventory. Journalize the above merchandising transactions for the Dollar Store assuming it uses a perpetual inventory system and the gross method.
|Beginning balance||35574||Cost of goods sold||245000|
|Sales returns||2400||Purchase returns and allowances||4500|
|Cost of Goods Sold|
Note: Shrinkage may be debited to a separate shrinkage expense account which is then closed to the cost of goods sold. Here the shrinkage has been directly debited to the cost of goods sold account.