Intermediate Accounting (ACCT 3103 and 3113) Intermediate Accounting, 16e STANDA

Question

Intermediate Accounting (ACCT 3103 and 3113) Intermediate Accounting, 16e STANDA BACK Problem 18-5 a distributor of ranch and farm equipment. Its products Martinez's products. Pricing and cost information on three of Martinez's mest popular products are as follows. of ranch and farm equipment. Its products range from small tools, power equipment for trench-digging and fencing, grain dryers, are sold direct via its company catalog and Internet and barn winches t products i Standalone Selling Price (Cost) Item Mini-trencher Power fence hole auger Grain/hay dryer Respond to the requirements related to the following incependent revenue arrangements for Martinez Ranch & Sandhill 3,800 ($2,100) 1,100 (800) 14,200 (11,800) On January 1, 2017, Martinez sells 50 augers to Mils Farm & Fleet for $55,000. Mills signs a 6-month note at an annual interest rate or 12%. Martinez allows Mlls to return any auger that cannot use within 40 days and receive a fun refund. Based on prior experience, Martner estimates that S% or units sold to mers ike Mins will be returned (using the most likely outcome approach). Martiner's costs to recover the products will be immaterial, and the returned augers are expected to be, resold at a profit. Prepare the journal entry for Martinez on January 1, 2017. (Credit account titles are automatically Indented when the 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) Account Titles and Explanation already posted Debit Credit (To record sales) already posted To record cost of goods sold)

Explanation / Answer

To record the invenotry sent on consignement

In the books of Martinez Ranch and sandhill Date Account title & Explanations Debit Credit Amount in $ April 25, 2017 Consignment 88000 Inventory sent on consignment 88000

To record the invenotry sent on consignement

June 30, 2017 Cash 39600 Consignment 4400 Sandhill depot 44000 To record the payment received Sandhill depot 44000 Consignment 44000 To record the consignment sales In the books of Sandhill depot Date Account title & Explanations Debit Credit Amount in $ June 30, 2017 Accounts Receivable 44000 Martinez Ranch and Sandhill 44000 To record the consignment sales June 30, 2017 Martinez Ranch and Sandhill 44000 Cash 39600 Commission Income 4400 To record the payment Cash 44000 Accounts Receivable 44000 To record the receipt from customer

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