Topic 2 / Merchandising Activities Below are transactions between Shoes Wow Inc., a wholesaler of shoes and Shoe Fit, a chain of retail shoe stores. Nov. 3 Nov. 5 Nov. 12 Shoes Wow Inc. sold Shoe Fit 300 pairs of sport shoes on account, terms 1/10, n/30. The cost of these shoes to Shoes Wow Inc. was $20 per pair, and the sales price was $60 per pair. Shoe Fit returned four pairs of shoes to Shoes Wow Inc. because they were the wrong size. Shoes Wow Inc. allowed Shoe Fit full credit for this retum. Shoe Fit paid the remaining balance due to Shoes Wow Inc. within the discount period. Both companies use a perpetual inventory system. Task 2.1: Record this series of transactions in the general Journal of Shoes Wow Inc. (The company records sales at gross sales price) >next page Task 2.2: Record this series of transactions in the general Journal of Shoe Fit. (The company records purchases of merchandise at net cost). next page Month Day Journal Entry Debits Credits Task 2.3: Prepare journals entries for the following, assuming the company uses a perpetual inventory method and records purchases at their net amounts. June 1 June 2 June 4 June 6 June 8 June 12 June 16 Purchased merchandise from Martin Company for $900 with the terms of 2/10,n/30. Returned $100 of the merchandise to the Martin Company. Purchased merchandise from the Elizabeth Company for $700 with the terms of 3/10, n/30. Paid the amount owed to the Martin Company. Returned $50 of the merchandise purchased from the Elizabeth Company. Sold all of the merchandise on hand from the Martin Company for $1,060 and collected 8% sales tax in addition to the sales price Paid the amount owed to Elizabeth Company in full. Date June 1 June 2 June 4 June 6 June 8 June 12 June 16 Journal Entries Debit Credit