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Exercise 5-12 (Algo) Recording purchases, sales, returns, and shipping LO P1, P2 Following are the merchandising transactions of Dollar Store. November 1 Dollar Store purchases merchandise for $2,50e on terms of 2/5, n/30, FOB shipping point, invoice date November 1. November 5 Dollar Store pays cash for the November 1 purchase. November 7 Dollar Store discovers and returns $200 of defective merchandise purchased on November 1, and paid for November 5, for a cash refund. November 10 Dollar Store pays $125 cash for transportation costs for the November 1 purchase. November 13 Dollar Store sells merchandise for $2,700 with terms n/30. The cost of the merchandise is $1,350. November 16 Merchandise is returned to the Dollar Store from the November 13 transaction. The returned items are pri at $245 and cost $123; 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. View transaction list Journal entry worksheet < 1 Dollar Store purchases merchandise for $2,500 on terms of 2/5, n/30, FOB shipping point, invoice dated November 1. 2 3 Note: Enter debits before credits. 4 5 6 7 8

Exercise 5-12 (Algo) Recording purchases, sales, returns, and shipping LO P1, P2 Following are the merchandising transactions of Dollar Store. November 1 Dollar Store purchases merchandise for $2,50e on terms of 2/5, n/30, FOB shipping point, invoice date November 1. November 5 Dollar Store pays cash for the November 1 purchase. November 7 Dollar Store discovers and returns $200 of defective merchandise purchased on November 1, and paid for November 5, for a cash refund. November 10 Dollar Store pays $125 cash for transportation costs for the November 1 purchase. November 13 Dollar Store sells merchandise for $2,700 with terms n/30. The cost of the merchandise is $1,350. November 16 Merchandise is returned to the Dollar Store from the November 13 transaction. The returned items are pri at $245 and cost $123; 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. View transaction list Journal entry worksheet < 1 Dollar Store purchases merchandise for $2,500 on terms of 2/5, n/30, FOB shipping point, invoice dated November 1. 2 3 Note: Enter debits before credits. 4 5 6 7 8

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**Exercise 5-12 (Algo) Recording Purchases, Sales, Returns, and Shipping** **Objective:** Learn to journalize merchandising transactions using a perpetual inventory system and the gross method. **Transactions:** - **November 1**: Dollar Store purchases merchandise for $2,500 on terms of 2/5, n/30, FOB shipping point, invoice dated November 1. - **November 5**: Dollar Store pays cash for the November 1 purchase. - **November 7**: Dollar Store discovers and returns $200 of defective merchandise purchased on November 1, and receives a $200 cash refund. - **November 8**: Dollar Store pays $125 cash for transportation costs for the November 1 purchase. - **November 10**: Dollar Store sells merchandise for $2,700 with terms n/30. The cost of the merchandise is $1,350. - **November 16**: Merchandise is returned to Dollar Store from the November 13 transaction. The returned items are priced at $245 and cost $123; the items were not damaged and were returned to inventory. **Task:** Journalize the above transactions for the Dollar Store. **Journal Entry Worksheet:** - View a transaction list for reference. - The worksheet includes a table with columns for Date, General Journal, Debit, and Credit. - Example entry: "Dollar Store purchases merchandise for $2,500 on terms of 2/5, n/30, FOB shipping point, invoice dated November 1." **Instructions:** Enter debits before credits in the worksheet. Use the perpetual inventory system to accurately reflect inventory and cash flow.
Transcribed Image Text:**Exercise 5-12 (Algo) Recording Purchases, Sales, Returns, and Shipping** **Objective:** Learn to journalize merchandising transactions using a perpetual inventory system and the gross method. **Transactions:** - **November 1**: Dollar Store purchases merchandise for $2,500 on terms of 2/5, n/30, FOB shipping point, invoice dated November 1. - **November 5**: Dollar Store pays cash for the November 1 purchase. - **November 7**: Dollar Store discovers and returns $200 of defective merchandise purchased on November 1, and receives a $200 cash refund. - **November 8**: Dollar Store pays $125 cash for transportation costs for the November 1 purchase. - **November 10**: Dollar Store sells merchandise for $2,700 with terms n/30. The cost of the merchandise is $1,350. - **November 16**: Merchandise is returned to Dollar Store from the November 13 transaction. The returned items are priced at $245 and cost $123; the items were not damaged and were returned to inventory. **Task:** Journalize the above transactions for the Dollar Store. **Journal Entry Worksheet:** - View a transaction list for reference. - The worksheet includes a table with columns for Date, General Journal, Debit, and Credit. - Example entry: "Dollar Store purchases merchandise for $2,500 on terms of 2/5, n/30, FOB shipping point, invoice dated November 1." **Instructions:** Enter debits before credits in the worksheet. Use the perpetual inventory system to accurately reflect inventory and cash flow.
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