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Prepare journal entries for the following merchandising transactions of Dollar Store assuming it uses a perpetual inventory system and the gross method.
Nov. 1 Dollar Store purchases merchandise for $1,500 on terms of 2/5, n/30, FOB shipping point, invoice dated November 1.
5 Dollar Store pays cash for the November 1 purchase.
7 Dollar Store discovers and returns $200 of defective merchandise purchased on November 1, and paid for on November 5, for a cash refund.
10 Dollar Store pays $90 cash for transportation costs for the November 1 purchase.
13 Dollar Store sells merchandise for $1,600 with terms n/30. The cost of the merchandise is $800.
16 Merchandise is returned to the Dollar Store from the November 13 transaction. The returned items are priced at $160 and cost $80; the items were not damaged and were returned to inventory.
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