Response:
Clarification:
Journal Entries
Event Account Title and Explanation Debit Credit
1 Inventory (or merchandise) $ 55,000
Accounts Payable $ 55,000
To document the purchase on account
2 Accounts Payable $ 8,500
Inventory (or merchandise) $ 8,500
To record the return of merchandise
3. Cash ( or Accounts receivable) $69,600
Sales Revenue $ 69,600
To log sales revenue
4. Cost of goods sold $43,000
Inventory (or merchandise inventory) $43,000
To document the cost of goods sold
5. Sales return and allowances $7,300
Cash (or Accounts receivable) $7,300
To record the sales return
6. Inventory (or merchandise Inventory) $ 4,500
Cost of goods sold $4,500
To document the reversal of COGS (Cost of goods sold)
7. Sales return and allowances $ 9510
Allowances for sales return $9510
To record the allowances for the anticipated return
8. Inventory - Estimated Return $5,800
Cost of goods $5,800
To document the allowances for the estimated return of the cost of goods sold
