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Q4-22QS

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Financial & Managerial Accounting
Found in: Page 209
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

Refer to QS 4-8 and prepare journal entries to record each of the merchandising transactions assuming that the company records sales using the net method and a perpetual inventory system.

Answer

Both sides of the journal totals $9,670.

See the step by step solution

Step by Step Solution

Step-by-Step SolutionStep 1: Definition of Accounts Receivables

Accounts receivables is an account that arises when a business entity reports an account in the balance sheet because credit sales were made to customers. It includes the amount not received for credit sales.

Step 2: Journal entries

Date

Accounts and Explanation

Debit $

Credit $

1 April

Accounts receivables

$3,000

Sales

$3,000

Cost of goods sold

1,800

Merchandise inventory

1,800

4 April

Sales return and allowance

300

Accounts receivables

300

Merchandise inventory

180

Cost of goods sold

180

8 April

Accounts receivables

990

Sales

990

Cost of goods sold

700

Merchandise inventory

700

11 April

Cash

2,700

Accounts receivables

2,700

$9,670

$9,670

Most popular questions for Business-studies Textbooks

Prepare journal entries to record the following merchandising transactions of IKEA, which uses the perpetual inventory system and gross method. (Hint: It will help to identify each receivable and payable; for example, record the purchase on May 2 in Accounts Payable—Havel.)

May 2 Purchased merchandise from Havel Co. for $10,000 under credit terms of 1∕15, n∕30, FOB shipping point, invoice dated May 2.

4 Sold merchandise to Rath Co. for $11,000 under credit terms of 2∕10, n∕60, FOB shipping point, invoice dated May 4. The merchandise had cost $5,600.

5 Paid $250 cash for freight charges on the purchase of May 2.

9 Sold merchandise that had cost $2,000 for $2,500 cash.

10 Purchased merchandise from Duke Co. for $3,650 under credit terms of 2∕15, n∕60, FOB destination, invoice dated May 10.

12 Received a $650 credit memorandum from Duke Co. for the return of a portion of the merchandise purchased on May 10.

14 Received the balance due from Rath Co. for the invoice dated May 4, net of the discount.

17 Paid the balance due to Havel Co. within the discount period.

20 Sold merchandise that cost $1,450 to Tamer Co. for $2,800 under credit terms of 2∕15, n∕60, FOB shipping point, invoice dated May 20.

22 Issued a $300 credit memorandum to Tamer Co. for an allowance on goods sold on May 20. 4

25 Paid Duke Co. the balance due, net of the discount.

30 Received the balance due from Tamer Co. for the invoice dated May 20, net of discount and allowance.

31 Sold merchandise that cost $3,600 to Rath Co. for $7,200 under credit terms of 2∕10, n∕60, FOB shipping point, invoice dated May 31.

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