Homework SourseJernigan Jerseys is a wholesaler distributing various NFL NB
Jernigan Jerseys is a wholesaler distributing various NFL, NBA, and MLB style jerseys of various quality to minor league and non-professional teams.
Two weeks ago they sold 25 jerseys on account to the Canton Catfish varsity football team in Canton, Mississippi for $45 each with an inventory cost of $28 each.
Last week seven of the jerseys were returned to Jernigan by Canton as the player\'s names were misspelled and have already been replaced through a different vendor.
If Jernigan uses the perpetual inventory method, what would be the journal entry (or entries) to put these seven jerseys back into inventory and to adjust the Canton Catfish account.
Item # 3 is the correct entry
Item # 1 is the correct journal entry
Item # 2 is the correct journal entry
Item # 4 is the correct entry
| Jernigan Jerseys | ||||
| DATE | Account Name | Post Ref | DEBIT | CREDIT |
| 1 | Accounts Receivable | $1,125 | ||
| Sales | $1,125 | |||
| Cost of Goods Sold | $700 | |||
| Merchandise Inventory | $700 | |||
| 2 | Accounts Receivable | $1,825 | ||
| Sales | $1,825 | |||
| 3 | Sales Returns & Allowance | $315 | ||
| Accounts Receivable | $315 | |||
| Merchandise Inventory | $196 | |||
| Cost of Goods Sold | $196 | |||
| 4 | Accounts Payable | $315 | ||
| Cash | $315 | |||
Solution
Journal entry :
So answer is a) Item # 3 is the correct journal entry
| Date | account & explanation | debit | credit |
| Sales return and allowance | 315 | ||
| Account receivable | 315 | ||
| (To record Sales return) | |||
| Merchandise inventory | 196 | ||
| Cost of goods sold | 196 | ||
| (To record cost of goods return) |
