C6-2 (Algo) Preparing Journal Entries for Inventory Purchases, Sales, Returns, and (Gross Method) Discounts, and Adjusting Income Tax (Chapters 4 and 6) [LO 6-3, LO 6-4, LO 6-6, LO 6-S1] (General Ledger) a. On October 1, the Business Students' Society (BSS) placed an order for 230 golf shirts at a unit cost of $20, under terms 2/10,n/30. b. The order was recelved on October 10, but some golf shirts differed from what had been ordered. Uncertain whether the shirts would be returned or kept, BSS decided to record any purchase discount only when taken (using the gross method). c. On October 11,85 golf shirts were returned to the supplier. d. On October 12 , BSS complained the remaining golf shirts were slightly defective so the supplier granted a $100 allowance. e. BSS paid for the golf shirts on October 13 . t During the first week of October, BSS received student and faculty orders for 80 goif shirts, at a unit price of $86, on terms 2/10. n/30. g. The golf shirts were dellvered to these customers on October 18 . Unfortunately, customers were unhappy with the golf shirts, so BSS permitted them to be returned or given an allowance (see h and h. Uncertain whether customers would keep or return the shirts, BSS decided to record any sales discount only when taken (using the gross method). h. On October 19 , one-half of the golf shirts were returned by customers to BSS. 1. On October 20 , an allowance was given on account equal to $11.20 per shirt for the remaining 40 shirts. 1. The customers paid their remaining balances on the last day of the month, October 31 . No further returns are expected. Prepare journal entries for the transactions described in events (a) through (j), using the date of each transaction as its reference. Assume BSS uses perpetual inventory accounts and accrue office expenses of $422 incurred on account, and to accrue income taxes of 5120. (If no entry is required for a transaction/event, select "No Joumal Entry Required" in the first account field.) 1 Record the placement of the order for goif shirts. 2. Record the inventory purchased on account. 3 Record the retum of the damaged inventory. 4. Record the allowance received for the defective inventory purchased. 5 Record the payment in full. 6 Record the sales revenue on account for the order. 7 Record the cost of goods sold for the order. Note : = journal entry has been entered 8 Record the return of the unsatisfactory merchandise sold on account. 9 Record the cost of goods returned. 10 Record the allowance for the remaining shirts. 11 On October 25 , the customers paid their remaining balances due on account. Record the customers' payments in full. 12 Record the office expense. 13 Record the income tax expense. Note : = journal entry has been entered