The following transactions are for Mack Company. 1. On December 3 Mack Company s

Question

The following transactions are for Mack Company.

1. On December 3 Mack Company sold $500,000 of merchandise to Pickert Co., terms 1/10, n/30. The cost of the merchandise sold was $320,000.
2. On December 8 Pickert Co. was granted an allowance of $28,000 for merchandise purchased on December 3.
3. On December 13 Mack Company received the balance due from Pickert Co.


(a) Prepare the journal entries to record these transactions on the books of Mack Company. Mack uses a perpetual inventory system. (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)

Explanation / Answer

3-Dec

8-Dec

13-Dec

B.

2-Jan

A.

3-Dec

Accounts Receivable $500,000           Sales $500,000 Cost of goods sold $320,000         Merchandise Inventory $320,000

8-Dec

Sales return&allowance $28,000         Accountsreceivable $28,000

13-Dec

Cash $467,280 Sales Discount $4,720       AccountsReceivable $472,000

B.

2-Jan

Cash $472,000       Accountsreceivable $472,000

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