May 20 Sold merchandise that cost $800 to Stephen Co. for $1,200 undercredit ter

Question

May 20   
Sold merchandise that cost $800 to Stephen Co. for $1,200 undercredit terms of 3/15, n/60, FOB shipping point, invoice dated May20 May 22 Issued a $100 credit memorandum to Stephen Co. for anallowance on goods sold from May 20. How would you journalize this using the perpetualsystem? May 20   
Sold merchandise that cost $800 to Stephen Co. for $1,200 undercredit terms of 3/15, n/60, FOB shipping point, invoice dated May20 May 22 Issued a $100 credit memorandum to Stephen Co. for anallowance on goods sold from May 20. How would you journalize this using the perpetualsystem?

Explanation / Answer

May 20                AccountsReceivables                           $1,200                      Sales                                                                     $1,200                goodssold to Stephen co. under                creditterms of 3/15, n/60 F.O.B.                shippingboard May 20                Costof GoodsSold                                 $800                      MarchandiseInventory                                          $800                  Costof goods sold transferred                   toInventory account for sales                   toStephen co. May 22                   Cash                                                      $1,100                   SalesDiscount                                          $100                         AccountsReceivables                                          $1,200                   Cashreceived from Stephen co.                   anddiscount allowed.

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