Furtastic manufactures imitation fur garments. On June 1, 2016, Furtastic made a
ID: 2450694 • Letter: F
Question
Furtastic manufactures imitation fur garments. On June 1, 2016, Furtastic made a sale to Willett's Department Store under terms that require Willett to pay $150,000 to Furtastic on June 30, 2016. In a separate transaction on June 15, 2016, Furtastic purchased brand advertising services from Willett for $12,000. The fair value of those advertising services is $5,000. Furtastic expects that 3% of all sales will prove uncollectible. Required: Prepare the journal entries to record the transactions above.Explanation / Answer
Journal entry worksheet, in the books, of Furtastic manufacturers
($) ($)
Date General Journal Debit Credit
1st June 2016 Willett.....................Dr 150,000
Sales 150,000
( Being sales on account)
15th june 2016 Brand Advertising services ...DR 12000
Creditors 12000
(being advertising services bought on account)
30th June 2016 Cash/Bank.................Dr 145,500
Provision for bad & doubtful debts 4500
Willett 150,000
( being money received on account of sales,net of 3% doubtful)
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