Question

The following are transactions between Windsor Corp., the consignor, and Wildhorse Stores Ltd., the consignee, for the month of June 2020. Windsor uses a perpetual inventory system and has a separate perpetual record for inventory sent out on consignment. At the end of each month, sales are reported by Wildhorse to Windsor and a net payment is made. The agreement stipulates that Wildhorse is to receive a 20% (of sales) commission and a 7% (of sales) rebate to offset its advertising expenses. June 1 June 5 June 30 June 30 Windsor Corp. ships merchandise costing $494,000 on consignment to Wildhorse Stores Ltd. Windsor pays the freight of $6,000 for the above shipment of June 1. Summary entry for the month of June: Wildhorse sells half of the merchandise for $665,000 cash. Wildhorse notifies Windsor that 50% of the merchandise has been sold for $665,000 and remits a cheque for the amount due under the consignment agreement. Windsor records the receipt of the cheque from Wildhorse. Prepare the journal entries necessary on the books of Windsor Corp. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit (To record consignment sales) (To record cost of goods sold)

Answer 1

Answer Page: nlo @ o Laural colores con the books of windsor Coup On June 1, - Inventory = $ 494000 On Junes, Inventory (corsignments) = $6000 On June 30, Revenue from consigoment sales - $665000 Advertising expense = 665000 X 7%. = $46550 Commission expenses 665000 X 20%. = $133000 Cash' - 665000 – 46550 - 133000 = $486450 On June 30 coof of goods sold - 494,000 X 50 % 5$$49000

June ! Page: No @ Date Particular Debit I Gedit Inventory (consignment) $494000 finished goods inventory $494000 Jones Inventory (comignments) $6000 : cash $ 6000 June 30 Casa $ 485450 Advertising expense $ 46550 Commission expense $133000 Revenue from consignment sales - $665000 June 30 cost of goods sold $244000 Inventory (comigoment) 247000 @ Journal entries on the booke of wildberge stores ltd Date Particular . Debit Credit Jonse No entry is reccoded June 5 Receivable from consignor $ 46550 cash $46550 June 5 - Cash $ 665000 Payable to consignos $665000 Payable fo. Consignor $665000 Receivable from consignox $ 46550 * Commission Yevenue $133000 June 30 $4.85450