Dearborn Industries sells to wholesalers. Customers must pay within 15 days or at the point of sale using a credit card. Dearborn’s cost of goods sold is 35% of sales. The company had the following selected transactions during March:

Requirements

1. Record Dearborn’s transactions, including the cost of goods sold entry for each sale.

2. Calculate the gross sales revenue for the month.

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March 3 Sold $25,000 of merchandise to Greenleaf Company on account. Sold $4,000 of merchandise to Yardley Corp., who paid by credit card. The credit card company charges Dearborn a fee of 2% on credit card sales. Greenleaf Company returned $5,000 of the merchandise from March 3. Sold $1,000 of merchandise to Athens, Ic., on account. Greenleaf Company paid the balance of what it owed for the purchase on March 3. Sold $12,000 of merchandise to Zurich Co. on account. Zurich reported that some of the merchandise received was scratched and returned $500 worth of merchandise to Dearborn. March 4 March 5 March 7 March 15 March 19 March 21 Sold $38,000 of merchandise to Niles Co. on account. Zurich paid the balance of what it owed for the purchase on March 19. Dearborn made the adjusting entries for the month to accrue for estimated future March 23 March 25 March 31 returns. Dearborn estimates that 4% of total sales will be returned.