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    Jernigan Jerseys is a wholesaler distributing various NFL, N

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    Jernigan Jerseys is a wholesaler distributing various NFL, NBA, and MLB style jerseys of various quality to minor league and non-professional teams.
    Two weeks ago they sold 25 jerseys on account to the Canton Catfish varsity football team in Canton, Mississippi for $45 each with an inventory cost of $28 each.
    Last week seven of the jerseys were returned to Jernigan by Canton as the player's names were misspelled and have already been replaced through a different vendor.
    If Jernigan uses the perpetual inventory method, what would be the journal entry (or entries) to put these seven jersey's back into inventory and to adjust the Canton Catfish account.

    Jernigan Jerseys
    DATE Account Name Post Ref DEBIT CREDIT
    1 Accounts Receivable $1,125
    Sales $1,125

    Cost of Goods Sold $700
    Merchandise Inventory $700

    2 Accounts Receivable $1,825
    Sales $1,825

    3 Sales Returns & Allowance $315
    Accounts Receivable $315

    Merchandise Inventory $196
    Cost of Goods Sold $196

    4 Accounts Payable $315
    Cash $315

    Answer
    A. Item # 1 is the correct journal entry
    B. Item # 4 is the correct entry
    C. Item # 2 is the correct journal entry
    D. Item # 3 is the correct entry

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    https://brainmass.com/economics/output-and-costs/jernigan-jerseys-wholesaler-distributing-462522

    Solution Preview

    7*45 = 315

    3 Sales Returns & Allowance $315
    Accounts ...

    Solution Summary

    The following posting helps with inventory method problems.

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