2. Preston Office Furniture, Inc. uses the perpetual inventory system and had th

Question

2. Preston Office Furniture, Inc. uses the perpetual inventory system and had the following transactions during the month of May: Sold merchandise to a customer on credit for $600, terms 2/10, n/30. The cost of the merchandise sold was $350 Sold merchandise to a customer for cash of $425. The cost of the merchandise was $250. Sold merchandise to a customer on credit for $1,300, terms 2/10, n/30. The cost of the merchandise sold was May 3 May 4 May 6 S750 The customer from May 3 returned merchandise with a selling price of $100. The cost of the merchandise returned May 8 was $55. The customer from May 6 paid the full amount due, less any appropriate discounts earned. The customer from May 3 paid the full amount due, less any appropriate discounts earned. May 15 May 31

Explanation / Answer

No Account titles & Explanations Debit Credit 3-May Accounts receivable 600 sales 600 cost of goods sold 350 merchandise inventory 350 4-May Cash 425 sales 425 cost of goods sold 250 merchandise inventory 250 6-May Accounts receivable 1,300 sales 1,300 cost of goods sold 750 merchandise inventory 750 8-May Sales return & allowanc 100 Accounts receivable 100 merchandise inventory 55 cos of goods sold e 55 15-May Cash 1274 sales discount (1300*2%) 26 Account receivable 1300 31-May Cash 500 Account receivable (600-100) 500

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