PART B Question 4 7 marks Donn July 9 s Beauty Salon had the

PART B- Question 4 (7 marks) Donn July 9: s Beauty Salon had the following transactions for July: Purchased 625 units of inventory at $6 per unit. The seller offered a cash discount of 2/10, n/30. Returned 30 defective units and received full credit. Paid the amount in full, less the returned items. July 10: July 18: Instructions: Prepare journal entries to record each of the preceding transactions. Assume a perpetual inventory system

Solution

In the books of Donna\'s Beauty Salon :

Date	Account Titles	Debit	Credit
		$	$
July 9	Merchandise Inventory ( 625 units x $ 6)	3,750
	Accounts Payable		3,750
July 10	Accounts Payable ( 30 units x $ 6)	180
	Merchandise Inventory		180
July 18	Accounts Payable $ ( 3,750 - 180)	3,570
	Cash ( $ 3,570 x 98 %)		3,498.60
	Merchandise Inventory ( $ 3,570 x 2%)		71.40