Sales Discounts. Casn, ccounts Raseivable, Aucaun s inventoryi Sales allo wances

Question

Sales Discounts. Casn, ccounts Raseivable, Aucaun s inventoryi Sales allo wances Prepare the necessary journal entries assuming the perpetual Inventory Revenue, Costof Goods Sotá, Sales Rehems aund y method is used 1. Dugan Company purchased Inventory on May 4 on credit from Smith Company for $3.,800 2/10, n/30. 2. The freight cost on that purchase was $150 S 15' AIR merchandise on credit for $3,800. The cost of the Smith Company records the sale of the inventory sold was $2,400 4. Dugan Company returns S300 of inventory purchased in 5. What entry does Smith make for the returned inventory of $300? The cost of the returned Inventory was $140. 6. Dugan pays for the inventory on May 14" using the 2% discount. 7. What entry does Smith make for the cash received on account less the discount?

Explanation / Answer

The following journal entries will be prepared for the given transactions:

Account Titles and Explanation Debit Credit 1 Inventory 3800       Accounts payable 3800 2 Inventory 150       Cash 150 3 Accounts receivable 3800       Sales revenue 3800 Cost of goods sold 2400       Inventory 2400 4 Accounts payable 300       Inventory 300 5 Sales returns and allowances 300       Accounts receivable 300 Inventory 140       Cost of goods sold 140 6 Accounts payable (3,800 - 300) 3500       Cash (3,500 x 98%) 3430       Inventory (3,500 x 2%) 70 7 Cash 3430 Sales discount 70       Accounts receivable 3500

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.