Journalize the following transactions for Cox Company using the gross method of

Question

Journalize the following transactions for Cox Company using the gross method of accounting for sales discounts. Assume a perpetual inventory system. Also, assume a constant gross profit ratio for all items sold. Make sure to enter the day for each separate transaction. April 7 Sold goods costing $6,000 to Lopez Company on account, $10,000, terms 4/10, n/30. April 13 Lopez Company was granted an allowance of $1,700 for returned merchandise that was previously purchased on account. The returned goods are in perfect condition. April 18 Received the amount due from Lopez Company.

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit Apr 7 Account receivable a/c 10000 Sales a/c 10000 Cost of goods sold a/c 6000 Merchandise inventory a/c 6000 (TO record sales) Apr 13 Sales return and allowance a/c 1700 Account receivable a/c 1700 Merchandise inventory a/c 1020 Cost of goods sold a/c 1020 (To record sales return) Apr 18 Cash a/c 8300 Account receivable a/c 8300 (To record cash received)

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