1. Unit 6 Merchandising Activities
Recording Purchases
Unit 6 Merchandising Activities
Transaction
Net Cost Method
Gross Cost Method
5/ 4
Purchase of merchandise on credit.
Inventory ,920
AP ,920
Inventory ,000
AP ,000
5/ 6
Freight Costs on purchases.
Inventory
Cash
Inventory
5/8
Return unsatisfactory Merchandise AP
Inventory
(with disc.) AP
Inventory
(w/o disc.)
5/ 9
Payment on account within a discount period.
AP ,920
Cash ,920
AP ,000
Cash ,920
Purch. Disc Taken
5/9
Failed to make payment w/in discount period.
AP ,920
Purch. Disc. Lost
Cash ,000
AP ,000

2. Unit 6 Merchandising Activities
Recording Sales
Unit 6 Merchandising Activities
Transaction
5/ 4
Sale of merchandise on credit.
Accounts Receivable ,000
Sales ,000
Cost of Goods Sold ,000
Inventory ,000
5/ 6
Return of merchandise sold
Sales Returns & Allowances AR
Inventory
Cost of Goods Sold
5/8
Cash received on account within a discount.
Cash ,920
Sales Discount
AR ,000
5/9
Cash received after discount period.
Cash ,000
AR ,000
Delivery Expenses
Delivery Expense
Cash