On Dec. 19, 2011, the Seller Corp. sold $12,000 of merchandise inventory on acco

Question

On Dec. 19, 2011, the Seller Corp. sold $12,000 of merchandise inventory on account to the Buyer Corp. On Dec. 22, 2011, Buyer called Seller to report that a portion of the goods had been damaged during shipment. Buyer asked for and received a $300 discount from Seller for these damaged goods. These damaged goods had been sold to Buyer for $2,200 and had cost Seller $1,700. Both Seller and Buyer maintain a periodic inventory. Required:
(a) Make the necessary Dec. 22, 2011 entry for Buyer; and
(b) Make the necessary Dec. 22, 2011 entry for Seller

Explanation / Answer

(a) Make the necessary Dec. 22, 2011 entry for Buyer 22 Dec2011 Acct Payable Dr 300 Purch Allow Cr 300 (b) Make the necessary Dec. 22, 2011 entry for Seller 22 Dec2011 Acct Rxable Dr 12000 Sales Cr 12000 22 Dec Sales ALlow Dr 300 Acct Rxable Cr 300

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