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Question

Journalize the following transactions for Ramirez Company using the gross method of accounting for sales discounts. Assume a perpetual inventory system. Also, assume a constant gross profit ratio for all items sold. Make sure to enter the day for each separate transaction.

May	9		Sold goods costing $6,000 to Bailey Company on account, $10,000, terms 5/10, n/30.
May	15		Bailey Company was granted an allowance of $800 for returned merchandise that was previously purchased on account. The returned goods are in perfect condition.
May	20		Received the amount due from Bailey Company.