The following transactions took place for Penny Ltd in July: 12 July Sold goods
ID: 2566170 • Letter: T
Question
The following transactions took place for Penny Ltd in July: 12 July Sold goods on account to Huff Ltd for $1 200, terms 2/10, n/30. The cost of the goods sold was $800. 19 July Forwarded a credit note for $90 to Huff Ltd covering part of the goods sold on 12 July, which cost $60. The goods returned were not defective. 21 July Received from Huff Ltd a cheque in full settlement of the above transactions. Both Penny Ltd and Huff Ltd use the perpetual inventory system. Ignore GST. Required: Journalise all the above transactions in the general journal of: a) Penny Ltd, and b) HuffLtod Narrations are not required.Explanation / Answer
Answer a. Books of Penny Ltd Journal Entry Date Particulars Dr. Amt. Cr. Amt. 12-Jul Accounts Receivable Dr. 1,200 To Sales 1,200 (record the Sales to Huff Ltd) 12-Jul Cost of Goods Sold Dr. 800 To Inventory 800 (Record the cost of goods sold to Huff Ltd.) 19-Jul Sales Return & Allowances Dr. 90 To Accounts Receivable 90 (Record the sales return by Huff Ltd) 19-Jul Inventory Dr 60 To Cost of Goods Sold 60 (record the inventory return by Huff Ltd) 21-Jul Cash ($1,110 X 98%) Dr. 1,088 Sales Discount ($1,110 X 2%) Dr. 22 To Accounts Receivable 1,110 (Record the Cash recd from Huff Ltd.) Answer b. Books of Huff Ltd Journal Entry Date Particulars Dr. Amt. Cr. Amt. 12-Jul Inventory Dr. 1,200 To Accounts Payable 1,200 (record the inventory purchased on credit from Panny Ltd) 19-Jul Accounts Payable Dr. 90 To Inventory 90 (record the purchase return) 21-Jul Accounts Payable Dr. 1,110 To Cash 1,088 To Purchase Discount 22 (Record the pament made to Huff Ltd.)
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.