Shirley Williams Apparel Store purchases clothing merchandise on account from various vendors. Below is an invoice from Terra Wear.

(a) Prepare Shirley's journal entries for each of the following transactions, assuming use of a periodic inventory system and the "gross method" of recording:

To record the invoice on May 5.
To record the return of the Fall Color collection on May 7.
To record the payment of the balance due if payment occurred on May 10.
To record the payment of the balance due if payment occurred on May 20.

(b) Repeat requirement (a) assuming Shirley’ uses the periodic inventory system and the "net method" of recording.

Transcribed Image Text:

TERRA WEAR ACTION SPORT CLOTHING HIGH POINT, CO BILL TO: SHIRLEY WILLIAMS APPAREL STORE DENVER SPORTS CENTER, #1234 DENVER, CO INVOICE #3778 F.O.B. DELIVERY DATE INVOICE DATE POINT MAY 5, 20X1 MAY 5, 20X1 DENVER TERMS 1/10.N/30 QTY. DESCRIPTION UNIT PRICE TOTAL 70 WORK OUT WONDER SPORT COLLECTION $125 $8.750 320 30 SUN FUN FUN WEAR 10 FALL COLOR COLLECTION 35 $1.050 60 $600 THANK YOU FOR YOUR BUSINESS! TOTAL $10.400