Question

Prepare the journal entries to record the following sales transactions in Pina Colada Corp.’s books. Pina Colada uses a perpetual inventory system. (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 0 for the amounts. Round answers to 0 decimal places, e.g. 125.)

Jan.	2		Pina Colada sold $45,900 of goods to Xtra Inc., terms 2/10, n/45, FOB destination. The cost of the goods sold was $25,704.
	5		The appropriate company paid freight costs of $1,100.
	6		Xtra returned $5,900 of the merchandise purchased from Pina Colada on January 2, because it was not needed. The cost of the merchandise returned was $3,304, and it was restored to inventory.
	11		Pina Colada received the balance due from Xtra.

Answer 1

Journal entry

Date	account and explanation	Debit	Credit
Jan 2	Account receivable	45900
	Sales revenue		45900
	(To record sales)
	Cost of goods sold	25704
	Merchandise inventory		25704
	(To record cost of goods sold
Jan 5	Freight out	1100
	Cash		1100
	(To record freight paid)
Jan 6	Sales return and allowance	5800
	Account receivable		5800
	(To record sales return)
	Merchandise inventory	3304
	Cost of goods sold		3304
	(To record cost of goods returned)
Jan 11	Cash (40000*98%)	39200
	Sales discount	800
	Account receivable (45900-5900)		40000
	(To record amount received)