Prepare journal entries to record each of the following sales transactions of TFC Merchandising. TFC uses a
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Prepare journal entries to record each of the following sales transactions of TFC Merchandising. TFC uses a perpetual inventory system and the gross method.
May 1. Sold merchandise for $600, with credit terms n∕60. The cost of the merchandise is $400.
9. The customer discovers slight defects in some units. TFC gives a price reduction (allowance) and credits the customer’s accounts receivable for $40 to compensate for the defects.
June 4. The customer in the May 1 sale returned $75 of merchandise for full credit. The merchandise, which had cost $50, is returned to inventory.
30. Received payment for the amount due from the May 1 sale less the May 9 allowance and June 4 return.
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