Prepare journal entries to record each of the following sales transactions of a merchandising company. The company uses a perpetual inventory system and the gross method. April 1 Sold merchandise for $$ \$ 7,200 $$, with credit terms $$ n / 30 $$; invoice dated April 1. The cost of the merchandise is $$ \$ 4,320 $$. April 4 The customer in the April 1 sale returned $$ \$ 800 $$ of merchandise for full credit. The merchandise, which had cost $$ \$ 480 $$, is returned to inventory, April 8 Sold merchandise for $$ \$ 3,100 $$, with credit terms of $$ 1 / 10, \mathrm{n} / 30 $$; invoice dated April 8 . Cost of the merchandise is $$ \$ 2,170 $$. April il Received payment for the amount due from the April 1 sale less the return on April 4.

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**April 1 – Sale Transaction**  
1. Record the sale at the gross amount:  
  $$ 	ext{Debit: Accounts Receivable } \$7,\!200 $$  
  $$ 	ext{Credit: Sales Revenue } \$7,\!200 $$

2. Record the cost of goods sold:  
  $$ 	ext{Debit: Cost of Goods Sold } \$4,\!320 $$  
  $$ 	ext{Credit: Inventory } \$4,\!320 $$

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**April 4 – Return Transaction**  
1. Record the sales return (reducing revenue):  
  $$ 	ext{Debit: Sales Returns and Allowances } \$800 $$  
  $$ 	ext{Credit: Accounts Receivable } \$800 $$

2. Record the return of merchandise to inventory:  
  $$ 	ext{Debit: Inventory } \$480 $$  
  $$ 	ext{Credit: Cost of Goods Sold } \$480 $$

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**April 8 – Sale Transaction with Discount Terms**  
1. Record the sale at the gross amount:  
  $$ 	ext{Debit: Accounts Receivable } \$3,\!100 $$  
  $$ 	ext{Credit: Sales Revenue } \$3,\!100 $$

2. Record the cost of goods sold:  
  $$ 	ext{Debit: Cost of Goods Sold } \$2,\!170 $$  
  $$ 	ext{Credit: Inventory } \$2,\!170 $$

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**April (Payment Received) – Collection from April 1 Sale**  
The net amount due is calculated as:  
  $$ \$7,\!200 - \$800 = \$6,\!400 $$

Record the collection:  
  $$ 	ext{Debit: Cash } \$6,\!400 $$  
  $$ 	ext{Credit: Accounts Receivable } \$6,\!400 $$
**Journal Entries:** 1. **April 1 – Sale Transaction** - Debit: Accounts Receivable \$7,200 - Credit: Sales Revenue \$7,200 - Debit: Cost of Goods Sold \$4,320 - Credit: Inventory \$4,320 2. **April 4 – Return Transaction** - Debit: Sales Returns and Allowances \$800 - Credit: Accounts Receivable \$800 - Debit: Inventory \$480 - Credit: Cost of Goods Sold \$480 3. **April 8 – Sale Transaction** - Debit: Accounts Receivable \$3,100 - Credit: Sales Revenue \$3,100 - Debit: Cost of Goods Sold \$2,170 - Credit: Inventory \$2,170 4. **April – Payment Received** - Debit: Cash \$6,400 - Credit: Accounts Receivable \$6,400

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