Sombrero Co., a furniture wholesaler, sells merchandise to Belarus Co. on accoun

Q: Sombrero Co., a furniture wholesaler, sells merchandise to Belarus Co. on accoun

Solution: Journal Debit Credit 1 Accounts Receivables 64,300 Sales 64,300 2 Cost of Goods Sold 38,000 Inventory 38,000 3 Sales return and allowance 13,300 Accounts Receivables 13,300 4 Inventory 8,000 Cost of Goods Sold 8,000 5 Cash 49,980 Sales discount ( 51,000 * 2 %) 1,020 Accounts Receivables 51,000

ID: 2416374 • Letter: S

Question

Sombrero Co., a furniture wholesaler, sells merchandise to Belarus Co. on account, $64,300, terms 2/10, n/30. The cost of the merchandise sold is $38,000. Sombrero Co. issues a credit memo for $13,300 for merchandise returned and subsequently receives the amount due within the discount period. The cost of the merchandise returned is $8,000.

a. Journalize Sombrero Co.'s entries for (1) the sale, including (2) the cost of the merchandise sold.

b. Journalize Sombrero Co.'s entries for (1) the credit memo, including (2) the cost of the returned merchandise.

c. Journalize Sombrero Co.'s entry for the receipt of the check for the amount due from Belarus Co. For a compound transaction, if an amount box does not require an entry, leave it blank.

Explanation / Answer

Solution:

Journal Debit Credit 1 Accounts Receivables 64,300 Sales 64,300 2 Cost of Goods Sold 38,000 Inventory 38,000 3 Sales return and allowance 13,300 Accounts Receivables 13,300 4 Inventory 8,000 Cost of Goods Sold 8,000 5 Cash 49,980 Sales discount ( 51,000 * 2 %) 1,020 Accounts Receivables 51,000

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Sombrero Co., a furniture wholesaler, sells merchandise to Belarus Co. on accoun

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