Question

Stylon Co., a women's clothing store, purchased $27,000 of merchandise from a supplier on account, terms FOB destination, 2/10, n/30, using the net method under a perpetual inventory system. Stylon returned merchandise with an invoice amount of $4,600, receiving a credit memo.

Required:
Journalize Stylon’s entry to record the purchase. If an amount box does not require an entry, leave it blank.

Answer 1

Date Accounts titles and Explanation Debit Credit

Inventory ($27,000*98%) $26,460

Accounts payable $26,460

(Being journal entry to record the purchase)

Date Accounts titles and Explanation Debit Credit

Accounts payable ($4600*98%) $4,508

Inventory $4,508

(Being journal entry to record the merchandise return)