I'm not sure how to properly categorize this accounting problem.
Journalize the transactions using a perpetual inventory system.
Waters Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, Water’s ledger showed Cash of $10,858 and Common Stock of $10,858.
May 1 Purchased merchandise on account from Hauke Wholesale Supply for $8,400, terms 1/10, n/30.
2 Sold merchandise on account for $5,500, terms 2/10, n/30. The cost of the merchandise sold was $4,125.
5 Received credit from Hauke Wholesale Supply for merchandise returned $300.
9 Received collections in full, less discounts, from customers billed on May 2.
10 Paid Hauke Wholesale Supply in full, less discount.
11 Purchased supplies for cash $1,222.
12 Purchased merchandise for cash $4,208.
15 Received $312 refund for return of poor-quality merchandise from supplier on cash purchase.
17 Purchased merchandise from Friedrich Distributors for $4,200, terms 2/10, n/30.
19 Paid freight on May 17 purchase $339.
24 Sold merchandise for cash $7,465. The cost of the merchandise sold was $5,565.
25 Purchased merchandise from Fasteners Inc. for $1,086, terms 3/10, n/30.
27 Paid Friedrich Distributors in full, less discount.
29 Made refunds to cash customers for returned merchandise $149. The returned merchandise had cost $112.
31 Sold merchandise on account for $1,737, terms n/30. The cost of the merchandise sold was $1,127.
