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1. Johson is a maker of cotton garments that are sold to various retailers. On December 9, Craig's Retailers sent back a shipment of goods that were unsatisfactory. As a gesture of goodwill, Johson agreed to the return of the goods. The goods were sold on account for $8,000 originally and cost $4,800. Assume they use the perpetual inventory system. Complete the following:

Do not enter dollar signs or commas in the input boxes. a) As Johsons bookkeeper prepare the journal entries to reflect the return.

Date	Account Title and Explanation	Debit	Credit
Dec 9	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCashCommon SharesCost of Goods SoldInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueInventoryNotes PayablePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseSalaries ExpenseSales DiscountSales Returns & AllowancesSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCashCommon SharesCost of Goods SoldInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueInventoryNotes PayablePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseSalaries ExpenseSales DiscountSales Returns & AllowancesSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense		Answer
	Record sales returns for unsatisfactory products
Dec 9	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCashCommon SharesCost of Goods SoldInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueInventoryNotes PayablePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseSalaries ExpenseSales DiscountSales Returns & AllowancesSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCashCommon SharesCost of Goods SoldInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueInventoryNotes PayablePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseSalaries ExpenseSales DiscountSales Returns & AllowancesSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense		Answer
	Restock inventory return

b) Journalize the entry if Craig's only returned half of the shipment.

Date	Account Title and Explanation	Debit	Credit
Dec 9	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCashCommon SharesCost of Goods SoldInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueInventoryNotes PayablePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseSalaries ExpenseSales DiscountSales Returns & AllowancesSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCashCommon SharesCost of Goods SoldInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueInventoryNotes PayablePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseSalaries ExpenseSales DiscountSales Returns & AllowancesSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense		Answer
	Record sales returns for unsatisfactory products
Dec 9	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCashCommon SharesCost of Goods SoldInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueInventoryNotes PayablePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseSalaries ExpenseSales DiscountSales Returns & AllowancesSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCashCommon SharesCost of Goods SoldInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueInventoryNotes PayablePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseSalaries ExpenseSales DiscountSales Returns & AllowancesSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense		Answer
	Restock inventory return

2.If a laptop company bought laptops for $10,300 and sold them for $13,900, how much would the gross profit be on the entire shipment if the business took advantage of the early cash payment terms of 3/15, n/30 from their supplier? Do not enter dollar signs or commas in the input boxes. Gross Profit = $Answer

3.Sandal Retailers purchased $9,800 worth of sandals from Comfy Wear Supplies at the end of October 10. Since Sandal Retailers has good cash reserves, the accountant took advantage of the early payment discount that Comfy Wear offers. Comfy Wears invoice shows terms of 2/15, n/30. What is the latest date that Sandal Retailers could pay the bill to take advantage of the discount?

Do not enter dollar signs or commas in the input boxes. AnswerJanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember Answer

b) As the bookkeeper for Sandal Retailers, prepare the journal entry to record the purchase on October 10. Assume they use the perpetual inventory system.

Date	Account Title and Explanation	DR	CR
Oct 10	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCashCommon SharesCost of Goods SoldInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueInventoryNotes PayablePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseSalaries ExpenseSales DiscountSales Returns & AllowancesSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCashCommon SharesCost of Goods SoldInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueInventoryNotes PayablePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseSalaries ExpenseSales DiscountSales Returns & AllowancesSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense		Answer

c) Journalize the transaction for payment of the invoice, assuming the payment was made on October 17.

Enter the credit accounts in alphabetical order.

Date	Account Title and Explanation	DR	CR
Oct 17	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCashCommon SharesCost of Goods SoldInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueInventoryNotes PayablePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseSalaries ExpenseSales DiscountSales Returns & AllowancesSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCashCommon SharesCost of Goods SoldInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueInventoryNotes PayablePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseSalaries ExpenseSales DiscountSales Returns & AllowancesSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense		Answer
	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCashCommon SharesCost of Goods SoldInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueInventoryNotes PayablePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseSalaries ExpenseSales DiscountSales Returns & AllowancesSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense		Answer

d) Journalize the transaction for payment of the invoice, assuming the payment was made on October 28.

Date	Account Title and Explanation	DR	CR
Oct 28	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCashCommon SharesCost of Goods SoldInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueInventoryNotes PayablePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseSalaries ExpenseSales DiscountSales Returns & AllowancesSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCashCommon SharesCost of Goods SoldInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueInventoryNotes PayablePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseSalaries ExpenseSales DiscountSales Returns & AllowancesSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense		Answer

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