Rockland Shoe Company records Sales Returns and Allowances and Sales Discounts a
ID: 2447074 • Letter: R
Question
Rockland Shoe Company records Sales Returns and Allowances and Sales Discounts as contra-revenues. Complete the following table, indicating the amount and direction of effect ( + for increase, – for decrease) of each transaction on each item reported in Rockland's income statement prepared for internal use. Be sure to total the effects.
July 12 Rockland sold merchandise to Kristina Zee at its factory store. Kristina paid for the $420purchase in cash. The goods cost Rockland $224.
July 15 Sold merchandise to Shoe Express at a selling price of $6,200, with terms 3/10, n/30. Rockland’s cost was $3,720.
July 20 Collected cash due from Shoe Express.
July 21 Sold merchandise to Fleet Foot Co. at a selling price of $2,240, with terms 2/10, n/30. Rockland’s cost was $1,344.
July 23 Fleet Foot Co. returned $1,120 of shoes and promised to pay for the remaining goods in August. The returned shoes were in perfect condition and had cost Rockland $672.
Rockland Shoe Company records Sales Returns and Allowances and Sales Discounts as contra-revenues. Complete the following table, indicating the amount and direction of effect ( + for increase, – for decrease) of each transaction on each item reported in Rockland's income statement prepared for internal use. Be sure to total the effects.
July 12 Rockland sold merchandise to Kristina Zee at its factory store. Kristina paid for the $420purchase in cash. The goods cost Rockland $224.
July 15 Sold merchandise to Shoe Express at a selling price of $6,200, with terms 3/10, n/30. Rockland’s cost was $3,720.
July 20 Collected cash due from Shoe Express.
July 21 Sold merchandise to Fleet Foot Co. at a selling price of $2,240, with terms 2/10, n/30. Rockland’s cost was $1,344.
July 23 Fleet Foot Co. returned $1,120 of shoes and promised to pay for the remaining goods in August. The returned shoes were in perfect condition and had cost Rockland $672.
Explanation / Answer
Transaction Date: July12 July15 July20 July21 July23 Totals Sales Revenues +420 +6200 +2240 0 8860 sales Returns and Allowances -1120 1120 Sales Discounts -186 -44.8 +44.8 186 Net Sales +420 +6014 +2195.2 -1075.2 7554 Cost of Goods sold -224 -3720 -1344 +672 4616 Gross Profit +196 +2294 +851.2 -403.2 2938
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