Current Attempt in Progress First Choice Ltd. completed the following merchandising transactions in the month of May 2021. At the beginning of May. First Choice's ledger showed Cash $7.200: Accounts Receivable $2.000: Inventory $3.600: Common Shares $8.000 and Retained Earnings $4,800. First Choice has experienced a return rate of 2% of sales and uses a perpetual inventory system. 1 May 4 7. 8 9 11 14 15 Purchased merchandise on account from Depot Wholesale Supply Ltd. for $5.440, terms 1/10. n/30. FOB shipping point Freight charges of $140 were paid by the appropriate party op the merchandise purchased on May 1. Sold merchandise on account to Ry Company for $3.600 teras n/30. FOB destination. The cost of the merchandise was $2.500. Freight charges of $88 were paid by the appropriate party on the May 4 sale. Received a $140 credit from Depot Wholesale Supply when merchandise was returned. Paid Depot Wholesale Supply in full. Purchased supplies for $400 cash. Received payment in full from Ry Company for merchandise sold on account on May 4. Collected $960 of the accounts receivable outstanding at the beginning of the month. All accounts were originally sold on terms of n/30. Purchased merchandise from Harlow Distributors Inc. for $2.400. terms n/30, FOB destination Freight of $48 was paid by the appropriate party on the May 18 purchase of merchandise Sold merchandise to various customers for $6.800 cash. The cost of the merchandise was $3,900. Paid a $96 cash refund to customers for returned merchandise. The cost of the returned merchandise was $56. It was restored to inventory. A physical inventory count was taken and determined that there was $4.880 of inventory on hand. Prepare any adjustment required. 18 21 22 29 31 (a) Your answer is correct. Date Account Titles and Explanation Debit Credit 1 Inventory 5440 Accounts Payable 5440 ay 3 Inventory 140 Cash 140 ay 4 Accounts Recevable 3600 Sales 3528 Refund Liability 72 (Sale of goods on account) ay 4 Cost of Goods Sold 2450 Estimated Inventory Returns 50 Inventory 2500 (Cost of goods sold recorded) ay 7 Freight Out 88 Cash 88 28 Accounts Payable 140 Inventory 140 ay 9 Accounts Payable 5300 Cash 5247 Inventory 53 ay 11 Supplies 400 Cash 400 ay 14 V Cash 3600 Accounts Recevable 3600 ay 15 Cash 960 Accounts Recevable 960 ay 18 V Inventory 2400 Accounts Payable 2400 ay 21 No Entry No Entry ay 22 Cash 6800 Refund ability Firefox No Entry Cash 6800 Refund ability 136 Sales 6664 (Sale of goods) ay 22 Cost of Goods Sold 3822 Estimated Inventory Returns Inventory 3900 (Cost of goods sold recorded) 229 Refund ability 96 Cash (Return of merchandise) y 29 Inventory 50 Estimated Inventory Returns (Return of merchandise, assuming goods are resaleable and returned to inventory) Cost of Goods Sold By 31 163 Inventory e Textbook and Media List of Accounts Attempts unlimited (b) the previous part