Question

On October 5, Crane Company buys merchandise on account from Blue Company. The selling price of the goods is $4,940, and the cost to Blue Company is $3,340.On October 8, Crane returns defective goods with a selling price of $670 and a fair value of $95. Blue Company uses the perpetual inventory system. Record the transactions on the books of Blue Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Cre (To record credit sales) (To record cost of goods sold on account) (To record credit granted for receipt of returned goods) (To record fair value of goods returned)

Answer 1

credit Date Oct i Account Titles and Explanation Crane Company Caccouets receivable) Sales (to record credit sales) Debit $4,940 $4,940 Oct 5 $ 3,340 Cart of goods sold Inventory (to record cost of goods sold on account) $3,340 Oct 8 $ 670 Sales Returns and allowances Crane Company (Accounts Receivable) (o record Credit granted for receipt of $ 670 returned goods) Oct8 $95 Inventory cost of goods sold (to record fair rolue of goods returned) $95 I hope_I've solved comectly _Please feel free to ask any queries and do give a thumbsup_1:_the_solution was satisfactory,__Thank you