Question

On March 1, Showcase Co., a furniture wholesaler, sells merchandise to Balboa Co. on account, $263,360, terms n/30. The cost of the merchandise sold is $146,820. Showcase Co. issues a credit memo on March 5 for $29,050 for merchandise returned prior to Balboa Co. paying the original invoice on March 29. The cost of the merchandise returned is $17,020. Journalize Showcase Co.’s entries for (a) the sale, including the cost of the merchandise sold, (b) the credit memo, including the cost of the returned merchandise, and (c) the receipt of the check for the amount due from Balboa Co. Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

Journal entries in the books showcase co
a)	Particulars				Debit	Credit
	Account receivable				$ 2,63,360.00
	sales revenue					$ 2,63,360.00
	(to record mervchandise sale )
	Cost of goods sold				$ 1,46,820.00
	merchandise inventory					$ 1,46,820.00
	(to record cost of merchandise sold )
b)	sale return & allowance				$     29,050.00
	account receivable					$     29,050.00
	(to record return of merchandise sold)
	Merchandise inventory				$     17,020.00
	cost of goods sold					$     17,020.00
	( to record cost of return merchandise sale)
c)	Cash (263360-29050)				$ 2,34,310.00
	accounts receivable					$ 2,34,310.00
	(to record the cash receipt from customer)