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27 May, 08:59

Journalize the following transactions for Roberts Company. Assume a perpetual inventory system. Also, assume a constant gross profit ratio for all items sold. Make sure to enter the day for each separate transaction.

August 6 Sold goods costing $8,400 to Garcia Company for cash, $14,000.

August 12 Garcia Company returned undamaged merchandise, purchased on August 6, for a cash refund, $1,560.

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  1. 27 May, 09:19
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    Aug 6. Dr cash $14,000

    Cr Sales $14,000

    Aug, 6 Dr Cost of goods sold $8,400

    Cr Merchandise inventory $8,400

    August 12

    Dr Sales returns $1,560

    Cr Cash $1,560

    August 12

    Dr Merchandise inventory $936

    Cr Cost of goods sold $936

    Explanation:

    In the first place, the goods sold for cash of $14,000 means that cash account is debited and sales is credited with $14,000

    However, with respect to cost of goods sold, there would a debit of $8,400 and credit of the same amount to merchandise inventory.

    The goods returned returned would necessitate debit of sales return with $1,560 and credit to cash of the same amount.

    The cost of goods returned is $936 ($1,560*$8400/$14,000) should debited to merchandise inventory and a credit to costs of good sold
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