Problem (1)

Prepare journal entries to record each of the following purchases transactions of a merchandising company. Show supporting calculations and assume a perpetual and periodic inventory system.

Mar. 5 Purchased 500 units of product at a cost of $5 per unit. Terms of the sale are 2/10, n/60 the invoice is dated March 5.

Mar.7 Returned 50 defective units from the March 5 purchase and received full credit.

Mar 15 paid the amount due from the March 5 purchase less the return on March 7.

Problem (2)

Prepare journal entries to record each of the following sales transactions of a merchandising company.

Show supporting calculations and assume a perpetual inventory system.

April. 1 sold merchandise for $2000, granting the customer terms of 2/10, invoice dated April.1.The cost of the merchandise is $1400.

April.4 The customer in the April .1 sale returned merchandise and received credit for $500.The merchandise, which had cost $350 is returned to inventory.

April.11 Received payment for the amount due from the April.1 sale less the return on April.7.