Chapter 5: Journal Entries for a Retail Business

Prepare journal entries for the following August transactions at the Moore Company:

August 1 Purchased merchandise on account from Norris, Inc., $4,000, terms 2/10, n/30.

5 Sold merchandise to Denton Company, $5,500 on account. The cost of the merchandise is $4,100.

7 Returned $800 of merchandise purchased August 1 from Norris, Inc. because it was defective.

Norris approved the return.

8 Purchased goods from Chambers, Inc., FOB shipping point, with a price of $9,000, 1/10, n/30.

Shipping costs are $300.

9 Sold merchandise to Baker Company, FOB shipping point, with a price of $12,000, 2/10, n/45.

Shipping costs are $350. Cost of the goods are $6000.

10 Returned merchandise to Chambers, Inc. (see August 8 entry), $2,300. Chambers approves this.

11 Paid Norris, Inc. the amount owed, less the return on August 7.

15 Received payment from Denton Company (see August 5 entry).

17 Baker Company returned merchandise, $ 1,700. Cost of the returned merchandise, $650.

18 Paid Chambers, Inc., less the return on August 10.

19 Received payment from Baker Company, less return on August 17.

Date	Description	Post Ref	Debit	Credit