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Journal Entries for Merchandise Transactions-Perpetual System Webb Company was established on July 1. Its sales terms are 3/10, n/30. Credit terms for its purchases vary with the supplier. Selected transactions for the first month of operations are given below. Unless noted, all transactions are on account and involve merchandise held for resale. Webb Company uses the perpetual inventory system. July 1 Purchased goods from Dawson, Inc., $2,500; terms 1/10, n/30. 2 Purchased goods from Penn Company, $5,500; terms 2/10, n/30. 3 Paid freight on shipment from Dawson, $300. 5 Sold merchandise to Ward, Inc., $1,400 ($1,100 cost). 5 Paid freight on shipment to Ward, Inc., $90. (Hint: debit Delivery Expense). 8 Returned $700 worth of the goods purchased July 1 from Dawson, Inc., because some goods were damaged. Dawson approved the return. 9 Received returned goods from Ward, Inc., worth $200 ($150 cost). 10 Paid Dawson, Inc., the amount due. 10 Purchased goods from Dorn Company with a list price of $3,000. Terms 2/10, n/30. 11 Paid freight on shipment from Dorn Company, $150. 15 Received the amount due from Ward, Inc. 15 Sold merchandise to Colby Corporation, $3,200 ($2,400 cost). 16 Mailed a check to Penn Company for the amount due on its July 2 invoice. 18 Received an allowance of $250 from Dorn Company for defective merchandise purchased on July 10. 19 Paid Dorn Company the amount due. 25 Received the amount due from Colby Corporation. 3,000 X 0 0 30 x 0 2,970 X 3,000 0 10 Accounts Payable Inventory Cash Paid Dawson, Inc. the amount due. 10 Inventory Accounts Payable Purchases from Dorn Company, 2/10, n/30. 11 Inventory Cash Paid freight on Dorn shipment. 15 Cash - 0 3,000 150 0 0 150 1,176 x 0 24 x 07 Sales Discounts Accounts Receivable 0 1,200 3,200 0 0 3,200 Received amount due from Ward, Inc. 15 Accounts Receivable Sales Revenue Sales to Colby Corporation. 15 Cost of Goods Sold Inventory Cost of goods sold to Colby Corporation. 16 Accounts Payable Cash 2,400 0 0 2,400 4,500 x 0 0 4,500 X 250 0 O 250 Paid Penn Company the amount due. 18 Accounts Payable Inventory Received credit memo for price adjustment from Dorn Company. 19 Accounts Payable Inventory 2,500 X O 0 48 x 2,352 X Cash 0 Paid Dorn the amount due. 25 Cash Sales Discounts 3,136 x 0 64 x O Accounts Receivable 0 3,200 Received amount due from Colby Corporation