Question

On June 3, 2017, Hunt Company sold to Ann Mount merchandise having a sales price of $8,000 (cost $6,000) with terms of n/60, f.o.b. shipping point. Hunt estimates that merchandise with a sales value of $800 will be returned. An invoice totaling $120 was received by Mount on June 8 from Olympic Transport Service for the freight cost. Upon receipt of the goods, on June 8, Mount returned to Hunt $300 of merchandise containing flaws. Hunt estimates the returned items are expected to be resold at a profit. The freight on the returned merchandise was $24, paid by Hunt on June 8. On July 16, the company received a check for the balance due from Mount. Prepare journal entries for Hunt Company to record all the events in June and July. (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.) Date Account Titles and Explanation Debit Credit (To record sales) (To record cost of goods sold) (To record sales returns) (To record cost of goods returned) (To record the freight cost)

Answer 1

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June 3, 2017 Accounts Receivable - Ann mount Sales Revenue 8000 Cost of goods sold Merchandise Inventory 6000 June 8,2017 Sales returns & Allowances Accounts Receivable - Ann mount 300 Merchandise Inventory (300 x 6/8) Cost of goods sold 225 June 8, 2017 Transportation out/ Freight out Cash 24 July 16, 2017 7700 Cash Accounts Receivable - Ann mount 7700