ant, then c Exercise 18-16 On March 10, 2017, Blue Company sold to Barr Hardware
ID: 2434898 • Letter: A
Question
ant, then c Exercise 18-16 On March 10, 2017, Blue Company sold to Barr Hardware 220 tool sets at a price of $50 each (cost $32 per set) with terms of n/60, f.o.b, shipping point. Blue allows Barr to return any unused tool sets within 60 days of purchase. Blue estimates that (1) 10 sets will be returned, (2) the cost of recovering the products will be immaterial, and (3) the returned tools sets can be resold at a profit. On March 25, 2017, Barr returned 7 tool sets and received a credit to its account. Prepare journal entries for Blue to record (1) the sale on March 10, 2017, (2) the return on March 25, 2017, and (3) any adjusting entries required on March 31, 2017 (when Blue prepares financial staterments). Blue estimate of returns is correct. (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.) the original No. Account Titles and Explanation Debit (To record sales) the ongnal Soft (To record cost of goods sold) (To record sales returns)Explanation / Answer
Answer:
Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31
(a)
Description
Debit $
Credit $
Entry to record the sales and cost of goods sold.
(,1)
Account receivable
11000
Sales Revenue
11000
(220x50)
7040
Cost of goods sold
7040
Inventory
(220x32)
Entry to record the sales return of 7 unit
(,2)
Sales Return and allowance
350
Account receivable
350
(7x50)
Inventory
224
Cost of goods sold
224
(7x32)
Adjusting entry required to record reaming sales return of 3 units are as follow
(,3)
Sales Return and allowance
150
Account receivable
150
(3x50)
Inventory
96
Cost of goods sold
96
(3x32)
________________________________________________________________________________
2
Income Statement(partial)
For the quarter ended mar-31,2017
Sales revenue
11000
less: Sales return and allowance(350+150)
-500
Net sales
10500
Less: Cost of goods sold
(7040-224-96)
6720
Gross profit
3780
Balance sheet(partial)
mar-31,2017
Assets.
11000
Account receivable (11000-350)
10650
allowance for Sales Return
-150
Net Account receivable
10500
returned inventory (including estimated)
320
(a)
Description
Debit $
Credit $
Entry to record the sales and cost of goods sold.
(,1)
Account receivable
11000
Sales Revenue
11000
(220x50)
7040
Cost of goods sold
7040
Inventory
(220x32)
Entry to record the sales return of 7 unit
(,2)
Sales Return and allowance
350
Account receivable
350
(7x50)
Inventory
224
Cost of goods sold
224
(7x32)
Adjusting entry required to record reaming sales return of 3 units are as follow
(,3)
Sales Return and allowance
150
Account receivable
150
(3x50)
Inventory
96
Cost of goods sold
96
(3x32)
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