Campus Stop Inc is a student co op On January 1
Campus Stop Inc. is a student co-op. On January 1, 2014, the beginning inventory was $ 150,000, the trade receivables balance was $ 4,000, and the allowance for doubtful accounts had a credit balance of $ 800. Campus Stop uses a perpetual inventory system and records inventory purchases by using the gross method. The following transactions (summarized) occurred during 2014:
a. Sold merchandise for $ 275,000 cash; the cost of sales is $ 137,500.
b. Received merchandise returned by customers as unsatisfactory and paid a cash refund of $ 1,600; the returned merchandise had cost $ 800.
c. Purchased merchandise from vendors on credit, terms 3/ 10, n/ 30, as follows:
i. August Supply Company, invoice price, $ 5,000.
ii. Other vendors, invoice price, $ 120,000.
d. Purchased equipment for use in store for cash, $ 2,200.
e. Purchased office supplies for future use in the store; paid cash, $ 700.
f. Paid freight on merchandise purchased, $ 400 cash.
g. Paid trade payables in full during the period as follows:
i. Paid August Supply Company after the discount period, $ 5,000.
ii. Paid other vendors within the discount period, $ 116,400.
Prepare journal entries for each of the preceding transactions.
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