Question: Refer to Exercise and prepare journal entries to record each of the merchandising transactions assuming that the periodic inventory system is used.
Exercise: Journalize the following merchandising transactions for CSI Systems assuming it uses a perpetual inventory system.
1. On November 1, CSI Systems purchases merchandise for $1,400 on credit with terms of 2y5, ny30, FOB shipping point; invoice dated November 1.
2. On November 5, CSI Systems pays cash for the November 1 purchase.
3. On November 7, CSI Systems discovers and returns $100 of defective merchandise purchased on November 1 for a cash refund.
4. On November 10, CSI Systems pays $80 cash for transportation costs with the November 1 purchase.
5. On November 13, CSI Systems sells merchandise for $1,500 on credit. The cost of the merchandise is $750.
6. On November 16, the customer returns merchandise from the November 13 transaction. The returned items sell for $200 and cost $100.