Question

Exercise 5-05 a-b (Part Level Submission) Presented below are transactions related to Blue Spruce Corp.. 1. On December 3, Blue Spruce Corp. sold $593,100 of merchandise on account to Whispering Winds Co., terms 2/10, n/30, FOB shipping point. The cost of the merchandise sold was $386,700. 2. On December 8, Whispering Winds Co. was granted an allowance of $28,400 for merchandise purchased on December 3. 3. On December 13, Blue Spruce Corp. received the balance due from Whispering Winds Co.

Prepare the journal entries to record these transactions on the books of Blue Spruce Corp. using a perpetual inventory system. (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 0 for the amounts.)

Answer 1

Answer Journal Entry credit Account & Explanation $ Debit Accounts Receivable 593, too 593,100 sales Revenue (Being credit sale recorded) cost of goods sold 386 700 Merchandise Inventory 386, to ( Being, cost of merch- andise sold recorded sales Returns and 28,400 Allowance Account Receivable 28,400 ( Being, Allowance recorded) cash 553,406 sales Discount 11, 294 Account Receivable 564,700 ( Being cash Received) working NOTE: - sales Discount = [(* 593/00 – 23,700)x20] = $11,294