Presented below are selected transactions of Molina Company. Molina sells in lar

Question

Presented below are selected transactions of Molina Company. Molina sells in large quantities to other companies and also sells its product in a small retail outlet.

March 1 Sold merchandise on account to Dodson Company for $10,000, terms 5/10, n/30.

March 3 Dodson Company returned merchandise worth $500 to Molina.

March 9 Molina collected the amount due from Dodson Company from the March 1 sale.

March 15 Molina sold merchandise for $1,400 in its retail outlet. The customer used his Molina credit card.

March 31 Molina added 1% monthly interest to the customer’s credit card balance.

Prepare journal entries for the transactions above.

Explanation / Answer

Date Title Debit credit march 1 Accounts receivable 10,000 sales 10,000 march 3 Sales return 500 Accounts receivable 500 march 9 Cash   (9500 -475) 9025 Discount allowed (9500 *.05) 475 Accounts receivable   (10000-500) 9500 march 15 Accounts receivable 1400 sales 1400 march 31 Accounts receivable (1400 *.01*.16/31 ) 7.23 credit card expense 7.23

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