Prepare journal entries to record each of the following sales transactions of TFC Merchandising. TFC uses a perpetual inventory system and the gross method.

Transcribed Image Text:

May 1 9 Sold merchandise for $600, with credit terms n60. The cost of the merchandise is $400. June 4 30 The customer discovers slight defects in some units. TFC gives a price reduction (allowance) and credits the customer's accounts receivable for $40 to compensate for the defects. The customer in the May 1 sale returned $75 of merchandise for full credit. The merchandise, which had cost $50, is returned to inventory. Received payment for the amount due from the May 1 sale less the May 9 allowance and June 4 return.