Question

PART A.

Presented below are transactions related to Wildhorse Company. Prepare the journal entries to record these transactions on the books of Wildhorse Company using a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

1. On December 3, Wildhorse Company sold $593,600 of merchandise on account to Novak Co., terms 4/10, n/30, FOB destination. Wildhorse paid $430 for freight charges. The cost of the merchandise sold was $383,200.
2. On December 8, Novak Co. was granted an allowance of $29,300 for merchandise purchased on December 3.

3. On December 13, Wildhorse Company received the balance due from Novak Co. Collapse question part (a) Prepare the journal entries to record these transactions on the books of Wildhorse Company using a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

PART B.

b. Assume that Wildhorse Company received the balance due from Novak Co. on January 2 of the following year instead of December 13. Prepare the journal entry to record the receipt of payment on January 2. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation No. Date Debit Credit Dec. 3 Account receivable 593600 1. 593600 Sales revenue (To record credit sale) Dec. 3 Cost of Goods Sold 383200 383200 Inventory (To record cost of merchandise sold) Freight-Out 430 Dec. 3 cash 430 (To record freight charges) Sales return and allowance 2. Dec. 8 29300 Account receivable 29300 Dec. 13 541728 3. Cash Sales Discounts 22572 Account receivable 564300

Answer 1

Journal entry

No	Date	General journal	Debit	Credit
1	Dec 3	Account receivable-Novak Co	593600
		Sales revenue		593600
		(To record credit Sales)
	Dec 3	Cost of goods sold	383200
		Inventory		383200
		(To record cost of merchandise sold)
	Dec 3	Freight out	430
		Cash		430
		(To record freight charges)
2	Dec 8	Sales allowance	29300
		Account receivable-Novak Co		29300
		(To record sales allowance)
3	Dec 13	Cash	541728
		Sales discount	22572
		Account receivable-Novak Co		564300