Question

Sales Transactions

Journalize the following merchandise transactions:

a. Sold merchandise on account, $92,500 with terms 1/10, n/30. The cost of the goods sold was $55,500.

b. Received payment less the discount.

c. Refunded $750 to customer for defective merchandise that was not returned.

Answer 1

Answer :

Journalization of the following merchandise transactions:

a.

Cash/bank account debit $92,500
To Debtors account $92,500
( As this journal entry is done on account, so all the given amount is in cash or bank transfer)
As the cost of goods sold was $55,500, so the profit of $37,000 is included in the amount of $92,500.

b.

Whenever the payment is received less the discount.
In such case, the journal entry would be :
Cash/Bank account would be debited
(as cash is received)
Sales account would be credited
(as payment received is for sales made)

Discount would not be shown in this journal entry.

c.

Sales refund account debit $750
To Cash account $750
(as refund of $750 was made for the defective merchandise).