Transaction processing. BRN Corporation sells on credit with terms of 2/10, n/30. Freight charges are always paid by the customer when the goods are delivered by a common carrier. During the month of April 2011, BRN completed the following transactions:
Date | Transaction |
2 | Sold inventory with a cost of $300 on account to TRB Corporation, $1,000. |
5 | Sold inventory with a cost of $200 for cash to FOF Corporation, $900. |
10 | Received cash from TRB Corporation for the sale on 2 April. |
15 | Wrote off uncollectible receivables, $500. |
19 | Sold inventory with a cost of $500 on account to TRB Corporation, $2,000. |
21 | Sold inventory with a cost of $300 for cash to FOF Corporation, $1,100. |
30 | Received cash from TRB Corporation for the sale on 19 April. |
30 | Estimated bad debts as 1% of total credit sales. |
a. Record the transactions in general journal form.
b. Compute BRN’s gross profit for April.
c. Specify the source documents BRN would use for each transaction.
d. Beyond the journal entries, what information would you want to capture in a relational database?
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