Question: 1. Enid Co., a women's clothing store, purchased $7,500 of merchandise from a supplier on account, terms FOB destination, 2/10, n/30. Enid Co. returned $1,200 of the merchandise, receiving a credit memorandum, and then paid the amount due within the discount period. Journalize Enid Co.'s entries to record
(a) the purchase,
(b) the merchandise return, and
(c) the payment.
2. A sale of merchandise on account for $4,000 is subject to a 7% sales tax.
(a) Should the sales tax be recorded at the time of sale or when payment is received?
(b) What is the amount of the sale?
(c) What is the amount debited to Accounts Receivable?
(d) What is the title of the account to which the $280 is credited?