Journalize the following transactions for griffin company. assume a perpetual inventory system. also, assume a constant gross profit ratio for all items sold.

make sure to enter the day for each separate transaction.

1) october 1: sold goods costing $3,600 to barnes company for cash, $6,000.

2) october 7: barnes company returned undamaged merchandise, purchased on october 1, for a cash refund, $670.

1) October 1:

1.1

Debit Cost of Goods sold $3,600

Credit Merchandise $3,600

1.2

Debit Cash $6,000

Credit Revenue $6,000

2) October 7

2.1.

Debit Revenue $670

Credit Cash $670

2.2.

Debit Merchandise $402

Credit Cost of Goods sold $402

Explanation:

1. October 1: when sold goods, the company recorded Cost of Goods sold and revenue:

1.1

Debit Cost of Goods sold $3,600

Credit Merchandise $3,600

1.2

Debit Cash $6,000

Credit Revenue $6,000

2. October 7

The percentage of revenue that merchandise returned = $670/$6,000 = 11.17%

Assume a constant gross profit ratio for all items sold.

Cost of returned merchandise = $3,600 x 11.17% = $402

2.1.

Debit Revenue $670

Credit Cash $670

2.2.

Debit Merchandise $402

Credit Cost of Goods sold $402

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