Question

A Show Me How N LD ... CengageNOW2 Online teaching and learning res Calculator Print Item + Comments Sales-Related Transactions Showcase Co., a furniture wholesaler, sells merchandise to Balboa Co. on account, $40,100, terms n/30. The cost of the merchandise sold is $24,100. Showcase Co. issues a credit memo for $8,000 for merchandise returned prior to Balboa Co. paying the original invoice. The cost of the merchandise returned is $4,800. a. Journalize Showcase Co.'s entries for (1) the sale, including (2) the cost of the merchandise sold. b. Journalize Showcase Co.'s entries for (1) the credit memo, including (2) the cost of the returned merchandise c. Journalize Showcase Co.'s entry for the receipt of the check for the amount due from Balboa Co. d when space Previous Next >

Answer 1

Journal Entries Account Title and Explanation Sl. No. Debit Credit 1 $ 40,100 Accounts Receivable Sales Revenue (To record sale of furniture) $ 40,100 2 $ 3,900 Cost of Goods Sold Inventory (To record cost of goods sold) $ 3,900 1 $ 8,000 Sales Returns and Allowances Accounts Receivable (To record credit memo for return of furniture sold) $ 8,000 2 $ 4,800 Inventory Cost of goods sold (To record inventory received on return of furniture) $ 4,800 $ 32,100 ($ 40,100 - $ 8,000) Cash Accounts Receivable (To record receipt of check for amount due) $ 32,100