Journalize the following transactions assuming the perpetual inventory system:
July 3 Sold merchandise on account for $3,750 terms.
The cost of the goods sold was $2,000. July 5 Issued credit memo for $1,050 for merchandise returned from sale on July 3. The cost of the merchandise returned was $610. July 12 Received check for the amount due for sale on July 3 less return on July 5. July 17 Sold merchandise for $7,000 plus 6% sales tax to cash customers. The cost of the goods sold was $3,830.

General Journal

Perpetual Inventory system

Date              Particulars                          Debit             Credit

July 3            Account Receivable        $3,750

                                                  Sales                         $3,750

Sold merchandise on account for $3,750 terms.

                        Cost of Goods Sold      $ 2000

                                 Merchandise Inventory            $2000

The cost of the goods sold was $2,000.

July 5         Sales Returns             $1,050

                                     Account Receivable         $1,050

Issued credit memo for $1,050 for merchandise returned from sale on July 3.

              Merchandise Inventory            $610

                                           Cost of Goods Sold      $ 610

The cost of the merchandise returned was $610.

July 12              Bank (cash)                  $2700

                                Account Receivable                 $2700

Received check for the amount due for sale on July 3 less return on July 5. ($3,750-  $1,050 )=$2700

July 17                      Cash                  $ 7420

                                        Sales                              $ 7420

Sold merchandise for $7,000 plus 6% sales tax to cash customers. As sales tax is added to the sales  a combined entry is made . ( 6%* 7000= $ 420)

                       Cost of Goods Sold      $ 3830

                                 Merchandise Inventory            $3830

The cost of the goods sold was $3,830.

Please see the Journal entries below.

Explanation:

July 3

Debit: Accounts Receivables $3,750

Debit: Cost of Goods Sold $2,000

         Credit: Sales Revenue $3,750

         Credit: Inventory $2,000

To record sales on Account.

July 5:

Debit: Sales Revenue $1,050

Debit: Inventory $610

         Credit: Cost of Goods Sold $610

         Credit: Accounts Receivables $1,050

To record credit memo.

July 12

Debit: Cash ($3,750 - $1,050) $2,700

         Credit: Accounts Receivables $2,700

To record payment of sales.

July 17

Debit: Accounts Receivables $7,420

Debit: Cost of Goods Sold $3,830

         Credit: Sales Revenue $7,000

         Credit: Sales Tax Payable $420

         Credit: Inventory $3,830

To record sales and cost of goods sold.

answer; encouraging the development of innovations by firms attempting to break a monopoly; (creative destruction)

answer; drop shippers;