Mark's Music is a store that buys and sells musical instruments in Ontario, where the HST rate is 13%. Mark's Music uses a perpetual inventory system and the earnings approach to revenue recognition. Transactions for the business are shown below: Nov. 2 un 5 7 8 Purchased 3 electric guitars from Fender Supply Limited, on account, at a cost of $700 each. Made a cash sale of 2 keyboards for a total invoice price of $2,400 plus applicable taxes. The cost of each keyboard was $725 Received a credit memorandum from Western Acoustic Inc. for the return of an acoustic guitar that was defective. The original invoice price before taxes was $600 and the guitar had been purchased on account. Mark's Music intends to return the defective guitar to the original supplier. One of the keyboards from the cash sale of November 4 was returned to the store for a full cash refund because the customer was not satisfied with the instrument. The keyboard, which cost $725, was returned to inventory Purchased supplies from a stationery store. The price of the supplies is $100 before all applicable taxes. Sold one Omega trumpet to Regional Band, on account for an invoice price of 56,700 before applicable taxes. The trumpet had cost Mark's Music $2,650. Purchased two saxophones from Yamaha Canada Inc. on account. The invoice price was $1,800 for each saxophone, excluding applicable taxes. Collected $4,350 on account. The payment included all applicable taxes, Returned to Yamaha Canada Inc. one of the saxophones purchased on November 13, as it was the wrong model Received a credit memorandum from Yamaha for the full purchase price. Made a payment on account for the amount owing to Fender Supply Limited for the purchase of November 2 10 13 14 16 20 uthor's Music transactions Credit anunt titles are automatical vindented when the meant Question 4 of 5 -120 E Prepare the journal entries to record the Mark's Music transactions. (Credit account titles are automatically indented when the amount Is entered. Do not indent manually. Record journal entries in the order presented in the problem. Round answers to 2 decimal places, es 5,275.75.) Date Debit Credit Account Titles and Explanation Merchandise Inventory Nov. 2 Accounts Payable Cash Nov. 4 Casti Sales HST Payable (To record sale of keyboards) Cost of Goods Sold Merchandise Inventory (To record cost of goods sold) Accounts Payable Nov.5 Merchandise Inventory Question 4 of 5 - /20 III Www Nov.5 Accounts Payable Merchandise Inventory HST Recoverable Sales Returns and Allowances HST Recoverable Nov. 7 Cash (To record credit for returned keyboard) Merchandise Inventory Cost of Goods Sold (To record cost of keyboard returned) Nov. 8 Nov. 10 Muman UT 10 Assignment - W21 - /20 Question 4 of 5 Nov. 10 (To record sale of trumpet) (To record cost of goods sold) Nov. 13 Nov. 14 Nov. 16 C per 10 Assignment - W21 Question 4 of 5
