Reference no: EM132941872

Following are the merchandising transactions for Dollar Store.

Nov.

1 Dollar Store purchases merchandise for $1,200 on terms of 2/5, n/30, FOB shipping point, invoice dated November 1.

5 Dollar Store pays cash for the November 1 purchase.

7 Dollar Store discovers and returns $150 of defective merchandise purchased on November 1, and paid for on November 5, for a cash refund.

10 Dollar Store pays $60 cash for transportation costs for the November 1 purchase.

13 Dollar Store sells merchandise for $1,296 with terms n/30. The cost of the merchandise is $648.

16 Merchandise is returned to the Dollar Store from the November 13 transaction. The returned items are priced at $255 and cost $128; the items were not damaged and were returned to inventory.

Problem 1: Journalize the above merchandising transactions for the Dollar Store assuming it uses a perpetual inventory system and the gross method.