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.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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