a. Spencer Sporting Goods Company engaged in the following tr Apr S transactions

Question

a. Spencer Sporting Goods Company engaged in the following tr Apr S transactions in April 2 ndise 12 n/30, FOB shipping returned for a full credit Sold merchandise on account for $288,000; terms 2/10, / 5 $43,200 of the goods sold on account on April 1 were 8 A sales allowance of $5,760 was granted on the mercha point, freight collect. Payment for these goods had not yet been received April 1 because the merchandise was damaged in shipment,id on Payment was received for the net amount due from the sale of A ndise sold on 10

Explanation / Answer

PART-1)

JOURNAL ENTRIES:

Apr. 1 Dr. Accounts Receivable $288,000.00

Cr. Sales $288,000.00

Apr 5 Dr. Sales Returns and Allowances $43,200.00

Cr. Accounts Receivable $43,200.00

Apr 8 Dr. Sales Returns and Allowances $5,760.00

Cr. Accounts Receivable $5,760.00

Apr 10 Dr. Cash $234,259.20

Dr. Sales Discounts $4,780.80

Cr. Accounts Receivable $239,040.00

($288,000 - $43,200 - $5,760 = $239,040; $239,040 * 0.02 = $4,780.80).

PART-2)

July 2 Dr. Purchases $43,200

Cr. Accounts Payable $43,200

July 15 Dr. Accounts Receivable.$ 64,800

Cr. Sales $64,800

July 16 Dr. Delivery Expense $2,160

Cr. Cash $2,160

July 20 Dr. Accounts Payable $2,880

Cr. Purchase Returns and Allowances $2,880

July 31 Accounts Payable $40,320

Cr. Cash $40,320

($43,200 - $2,880 = $40,320)

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