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Question

People Window Help O Gafork x(C) MH Connect xy D Practice Exam 2?D AlmuWN2c Mo x Me m.tpx E connect ACTG121: ACTG 121 A7 Summer 2018 ACCOUNTING Practice Exam 2 Question 2 (of 19 2. 5.26 points Two different companies, Ripper and December. Both companies use a entered into the folowing inventory transactions during nventory system December 3-Ripper Corporation sold inventory on account to Berners Corp. for $490.000, terms 2/0, n/30. This inventory originally cost Ripper $309,000 returned this inventory to inventory at its original cost of $1,955 December 12-Berners Corp paid Ripper Corporation for the amount owed Required a. Prepare the jounal entries to record these transactions on the books of Ripper Corporation, (If no entry is required for a transactionlevent, select "No Journal Entry Required" in the first account field) Debit No 6 5 3 2

Explanation / Answer

Journal entries in the books of Ripper corporation, Riper sold $ 490,000 to Berner at terms of 2/10, n30

1, Dec 3  

increase in accounts receivable DR $490,000

Increase in sales CR $490,000

Increase in cost of goods sold DR $309,000

Decrease in inventory CR $309,000

2. Dec 8 Berner returns $3100

Decrease in sales DR $3100

Decrease in accounts receivable CR $3100

Increase in inventory DR 1955

Decrease Cost of Goods sold CR 1145 (3100-1955)

3. Dec 12 Berner paid Ripper amount owed

Increase in cash DR $ 486,900 (490000-3100)

Decrease accounts receivable CR $486,000

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