Ex. 194
Prepare the necessary journal entries to record the following transactions, assuming Darby Company uses a perpetual inventory system.
(a)Darby sells $50,000 of merchandise, terms 1/10, n/30. The merchandise cost $30,000.
(b)The customer in (a) returned $5,000 of merchandise to Darby. The merchandise returned cost $3,000.
(c)Darby received the balance due within the discount period.
Ex. 195
Newell Company completed the following transactions in October:
Credit Sales Sales Returns Date of
Date Amount Terms Date AmountCollection
Oct.3$ 9002/10, n/30Oct.8
Oct.111,2003/10, n/30Oct. 14$ 200Oct.16
Oct.175,0001/10, n/30Oct. 201,000Oct.29
Oct.211,4002/10, n/60Oct. 23200Oct.27
Oct.231,8002/10, n/30Oct. 27300Oct.28
Ex. 195
(Cont.)
Instructions
(a)Indicate the cash received for each collection. Show your calculations.
(b)Prepare the journal entry for the
(1)Oct. 17 sale. The merchandise sold had a cost of $3,500.
(2)Oct. 23 sales return. The merchandise returned had a cost of $140.
(3)Oct. 28 collection.
Newell uses a perpetual inventory system.