Prepare the journal entries to record the following transactions on Cullumber Company's books using a perpetual inventory system. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) (a) On March 2, Cullumber Company sold $928,800 of merchandise to Oriole Company, terms 2/10, n/30. The cost of the merchandise sold was $511,500. (b) On March 6, Oriole Company returned $108,400 of the merchandise purchased on March 2. The cost of the merchandise returned was $60,800. (c) On March 12, Cullumber Company received the balance due from Oriole Company.

Question

Solomon Moreno

Business

18 September, 07:53

Prepare the journal entries to record the following transactions on Cullumber Company's books using a perpetual inventory system. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) (a) On March 2, Cullumber Company sold $928,800 of merchandise to Oriole Company, terms 2/10, n/30. The cost of the merchandise sold was $511,500. (b) On March 6, Oriole Company returned $108,400 of the merchandise purchased on March 2. The cost of the merchandise returned was $60,800. (c) On March 12, Cullumber Company received the balance due from Oriole Company.

+2

Answers (1)

Know the Answer?

Makai Martinez · Answer 1

The journal entries are as follows:

(a) On March 2,

(i) Accounts receivables A/c Dr. $928,800

To sales revenue $928,800

(To record sale of merchandise)

(ii) Cost of merchandise sold A/c Dr. $511,500

To merchandise inventory $511,500

(To record cost of merchandise sold)

(b) On March 6,

(i) Sales returns and allowances A/c Dr. $108,400

To Accounts receivables $108,400

(To record sales return and allowances)

(ii) merchandise inventory A/c Dr. $60,800

To Cost of merchandise sold $60,800

(To reverse cost of merchandise sold)

(c) On March 12,

Cash { ($928,800 - $108,400) * 0.98} Dr. $803,992

Sales discount { ($928,800 - $108,400) * 0.02} Dr. $16,408

To accounts receivable ($928,800 - $108,400) $820,400

(To record cash received from receivables)