JKL Company uses the perpetual inventory method and sells to its customers under
ID: 2436851 • Letter: J
Question
JKL Company uses the perpetual inventory method and sells to its customers under 2/10/ net 30 terms.
What entry would JKL Company make if it sold 100 widgets to Customer Company for $10,000 that it had in inventory at a cost of $6,000 on October 1.
What entry would JKL make on October 4 if Customer Company returned 10 widgets for credit because they were damaged in shipment?
What entry would JKL make if Customer Company paid for the remaining 90 widgets on October 9?
What is the net sales amount on this transaction?
What entry would JKL make if it discovered after the performance of a physical inventory on October 31 that the count sheets indicated that the perpetual record was overstated by $200?
Explanation / Answer
Req 1: Journal entry: 1-Oct Accounts receivable Dr. 10000 Sales revenue account 10000 Cost of goods sold Account Dr. 6000 Merchandise inventory account 6000 Req 2: 4-Oct Sales retrurn and allowance Dr. 1000 Accounts receivable (10000/100*10) 1000 Merchandise inventory Dr. 600 Cost of goods sold account 600 Req 3: 9-Oct Cash account Dr.(9000*98%) 8820 Sales discount account Dr. (9000*2%) 180 Accounts receivable 9000 Req 4: Net sales: Gross sales revenue 10000 Less: Sales return and allowance 1000 Less: Sales discount 180 Net sales: 8820 Req 5: Journal entry for inventory shrinkage: Cost of good sold Account Dr. 200 Merchandise inventory account 200
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