Chapter 4, Problem 31BE

Journalizing inventory sales, returns, and freight transactions (Learning Objectives 4 & 5) 10-15 min.

Journalize the following transactions for Luna’s Wholesale, Inc., that occurred during the month of September, assuming the “net” method is used. Luna’s Wholesale, Inc.’s cost of inventory is 45 percent of the sales price.

Sep 3	Sold $1,600 of merchandise on account, terms 2/15, n/45, FOB shipping point. Luna’s Wholesale, Inc., prepaid $50 of shipping costs and added the amount to the customer’s invoice.
7	Issued a credit memo to the customer acknowledging the return of $100 of unwanted goods.
16	Received payment in full from the customer for the September 3 invoice.