Prepare journal entries to record each of the following sales transactions of a
ID: 2500769 • Letter: P
Question
Prepare journal entries to record each of the following sales transactions of a merchandising company.(sales transactions) show supporting calculations and assume a perpetual inventory system. Sold 200 units of merchandise to a customer for dollar 5 per unit under credit terms of 2/10,n/3, FOB shipping point and the invoice is dated july 1st. The merchandise had cost dollar 3 per unit. Make the entry for the sale and the entry for the cost of good sold. The customer reurn 5 units because those units did not fit the customer's needs. The seller restores the units to its inventory. make the journal entry to record the sales return and to return the merchandise to inventory. The custormer discovers that 10 units are defective but are still of some use and thus keeps the units because the seller sends the buyer a credit memorandum for dollar 100 to compensate them for the damage. The customer determines that 4 units are the wrong color but keeps them anyway and seller sends a dollar credit memorandum to compensate. The customer returns 3 units to the seller. Make the journal entry to return the merchandise back to inventory on the seller's books.Explanation / Answer
Journal entries:
Date Description Debit Credit July 1 Account receiavable $1,000 To Sales $1,000 Cost of goods sold $600 To Inventories $600 July 1 Inventory $15 to Cost of goods sold $15 Sales return and allowances $25 To Account receivable $25 July 8 Sales Return & allowances $100 Account recievable $100 July 14 Sales return & allowances $15 To Account recievable $15 July 12 Inventory $9 To Cost of goods sold $9