Question

Journal Entries for Sale, Return, and Remittance-Perpetual System On October 14, the Patrick Company sold merchandise with an invoice price of $1,600 ($1,350 cost), with terms of 2/10, n/30, to the Baxter Company. On October 18, $300 of the merchandise ($210 cost), was returned because it was the wrong size. On October 24, the Patrick Company received a check for the amount due from the Baxter Company. Required Prepare the journal entries for the Patrick Company using the perpetual inventory system.

Answer 1

Date Credit Oct 14 Debit $ 1,600 - General Journal Accounts Receivable Sales Revenue (To record sales) $1,600 Oct 14 $1,350 Cost of Govels sold Inventory (To second cost of goods sold) $1,350 Oct. 18 $300 sales Returns and Allowances Accounts Receivable (To recold merchandise returned) $300 Oct. 18 $ 210 Inventory Cost of Goods Sold (To record cost of goods $ 210 returned Oct 24 Cash $1,274 Sales Discounts Accounts Receivable To record remittance received) $1,300

Calculation. Oct. 24 Accounts Receivable = sales - Sales Returns - $1,600 - $300 = $ 1,300 Sales Discounts – $1,300 x 2% discount = $ 26 Cash - Sales Discounts Accounts Receivable – - $ 1,300 - $ 26 - $1,274