Questions: 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 6,800, with credit terms n / 30; invoice dated April 1. The cost of the merchandise is 4,080. April 4 The customer in the April 1 sale returned 760 of merchandise for full credit. The merchandise, which had cost 456, is returned to inventory. April 8 Sold merchandise for 2,900, with credit terms of 1 / 10, n / 30; invoice dated April 8. Cost of the merchandise April 11 is 2,030.

To prepare journal entries for the given sales transactions using a perpetual inventory system and the gross method, we need to record both the sales and the cost of goods sold (COGS) for each transaction. Let's go through each transaction step by step:

• Sold merchandise for $6,800, with credit terms n/30.
  • Sales Entry:
    • Debit Accounts Receivable: $6,800
    • Credit Sales Revenue: $6,800
  • COGS Entry:
    • Debit Cost of Goods Sold: $4,080
    • Credit Inventory: $4,080

• The customer in the April 1 sale returned $760 of merchandise for full credit. The merchandise, which had cost $456, is returned to inventory.
  • Sales Return Entry:
    • Debit Sales Returns and Allowances: $760
    • Credit Accounts Receivable: $760
  • Inventory Return Entry:
    • Debit Inventory: $456
    • Credit Cost of Goods Sold: $456

• Sold merchandise for $2,900, with credit terms of 1/10, n/30. Cost of the merchandise is $2,030.
  • Sales Entry:
    • Debit Accounts Receivable: $2,900
    • Credit Sales Revenue: $2,900
  • COGS Entry:
    • Debit Cost of Goods Sold: $2,030
    • Credit Inventory: $2,030

1. April 1:

   • Accounts Receivable: $6,800 (Debit)
   • Sales Revenue: $6,800 (Credit)
   • Cost of Goods Sold: $4,080 (Debit)
   • Inventory: $4,080 (Credit)

2. April 4:

   • Sales Returns and Allowances: $760 (Debit)
   • Accounts Receivable: $760 (Credit)
   • Inventory: $456 (Debit)
   • Cost of Goods Sold: $456 (Credit)

3. April 8:

   • Accounts Receivable: $2,900 (Debit)
   • Sales Revenue: $2,900 (Credit)
   • Cost of Goods Sold: $2,030 (Debit)
   • Inventory: $2,030 (Credit)

These entries reflect the sales transactions and the associated cost of goods sold, as well as the return of merchandise, in accordance with the perpetual inventory system and the gross method.