Prepare the journal entries to record the following transactions on Monroe Compa
ID: 2345513 • Letter: P
Question
Prepare the journal entries to record the following transactions on Monroe Company's books using a perpetual inventory system.(a) On March 2, Monroe Company sold $900,000 of merchandise to Churchill Company, terms 2/10, n/30. The cost of the merchandise sold was $620,000.
Description/Account Debit Credit
(To record cost of merchandise sold.)
(b) On March 6, Churchill Company returned $120,000 of the merchandise purchased on March 2 because it was defective. The cost of the returned merchandise was $90,000.
Description/Account Debit Credit
(To record cost of merchandise sold.)
(c) On March 12, Monroe Company received the balance due from Churchill Company. (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2.)
Description/Account Debit Credit
Explanation / Answer
A)
Description Debit Credit
Accounts Receivable 900,000
Sales 900,000
Cost of Goods Sold 620,000
Merchandise Inventory 620,000
B)
Description Debit Credit
Sales Return and Allowances 120,000
Accounts Receivable 120,000
Merchandise Inventory 90,000
Cost of Goods Sold 90,000
C)
Description Debit Credit
Cash 764,400
Sales Discounts 15,600
Accounts Receivable 780,000