Preston Office Furniture uses the periodic inventory system and the gross method of accounting for sales. It had the following transactions during the month of May: May 3Sold merchandise to a customer on credit for $600, terms 2/10, n/30. The cost of the merchandise sold was $350.May 4Sold merchandise to a customer for cash of $425. The cost of the merchandise was $250.May 6Sold merchandise to a customer on credit for $1,300, terms 2/10, n/30. The cost of the merchandise sold was $750.May 8The customer from May 3 returned merchandise with a selling price of $100. The cost of the merchandise returned was $55.May 15The customer from May 6 paid the full amount due, less any appropriate discounts earned.May 31The customer from May 3 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.Prepare the required journal entries that Preston Office Furniture must make to record these transactions.
What will be an ideal response?
| May 3 | Accounts receivable…………………....… | 600 | ? |
| ? | Sales…………………………………… | ? | 600 |
| May 4 | Cash…………………………………….…. | 425 | ? |
| ? | Sales……………………………...….… | ? | 425 |
| May 6 | Accounts Receivable………………….… | 1,300 | ? |
| ? | Sales……………………………....…….. | ? | 1,300 |
| May 8 | Sales returns and allowances……………… | 100 | ? |
| ? | Accounts receivable………………....… | ? | 100 |
| May 15 | Cash………………………………………. | 1,274 | ? |
| ? | Sales Discounts…………….…………….. | 26 | ? |
| ? | Accounts receivable…………………… | ? | 1,300 |
| ? | Calculation: Discount = $1,300 * .02 = $26 | ? | ? |
| May 31 | Cash……………………………………… | 500 | ? |
| ? | Accounts receivable…………………… | ? | 500 |
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