Prepare journal entries to record the following merchandise transactions of Martinez Excavation Equipment, which applies the perpetual inventory system and the gross method of recording invoices.May 1Purchased merchandise from Kona Company for $12,700 under credit terms of 2/15, n/45, FOB destination, and invoice dated May 1.3Sold merchandise to Walton for $8,000 under credit terms of 1/10, n/30, FOB destination, invoice date May 3. The merchandise had cost $5,000.5Paid $350 cash for shipping charges related to the May 3 sale.6Returned $2,000 of the merchandise purchased on May 1 to Kona Company.7Walton returned merchandise from the May 3 sale that had cost Martinez $625 and had been sold for $1,000. The merchandise was restored to inventory.13Received the balance due from Walton less the
return.14Paid the amount due Kona Company.
What will be an ideal response?
| May 1 | Merchandise Inventory | 12,700 | ? |
| ? | Accounts Payable | ? | 12,700 |
| ? | ? | ? | ? |
| 3 | Accounts receivable | 8,000 | ? |
| ? | Sales | ? | 8,000 |
| ? | Cost of goods sold | 5,000 | ? |
| ? | Merchandise inventory | ? | 5,000 |
| ? | ? | ? | ? |
| 5 | Delivery expense | 350 | ? |
| ? | Cash | ? | 350 |
| ? | ? | ? | ? |
| 6 | Accounts payable | 2,000 | ? |
| ? | Merchandise inventory | ? | 2,000 |
| ? | ? | ? | ? |
| 7 | Sales returns and allowances | 1,000 | ? |
| ? | Accounts Receivable | ? | 1,000 |
| ? | Merchandise Inventory | 625 | ? |
| ? | Cost of goods sold | ? | 625 |
| ? | ? | ? | ? |
| 13 | Cash ($8,000 ? $1,000) * .99 | 6,930 | ? |
| ? | Sales discounts ($8,000 ? $1,000) * .01 | 70 | ? |
| ? | Accounts receivable | ? | 7,000 |
| ? | ? | ? | ? |
| 14 | Accounts payable ($12,700 ? $2,000). | 10,700 | ? |
| ? | Merchandise inventory ($10,700 * .02) | ? | 214 |
| ? | Cash ($10,700 ? $214) | ? | 10,486 |
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