Question

On October 5, Pina Colada Corporation buys merchandise on account from Pina Colada Company. The selling price of the goods is $5,010, and the cost to Pina Colada Company is $2,530. On October 8, Pina Colada returns defective goods with a selling price of $740 and a fair value of $95. Record the transactions on the books of Pina Colada Company. (Credit account titles are automatically Indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Date Account Titles and Explanation Debit Credit (To record credit sales) (To record cost of goods sold on account) (To record credit granted for receipt of returned goods) Activate Windows

Answer 1

Journal entry

Date	General journal	Debit	Credit
Oct 5	Account receivable	5010
	Sales revenue		5010
	(To record credit sales)
Oct 5	Cost of goods sold	2530
	Merchandise inventory		2530
	(To record cost of goods sold on account)
Oct 8	Sales return and allowance	740
	Account receivable		740
	(To record credit granted for receipt of returned goods)
Oct 8	Merchandise inventory	95
	Cost of goods sold		95
	(To record cost of goods returned)