Asked by Glenda Gonzalez on May 03, 2024
Verified
On March 15, Monroe Sales sells $9,525 on account to Garrison Brewer with terms of 2/10, n/30. The cost of merchandise sold was $6,905.
(a) Journalize the sale and the recognition of the cost of the sale.
(b) On March 20, a $125 credit memo is given to Garrison Brewer due to merchandise that was the wrong color. Journalize this event. The cost of the returned merchandise was $65.
(c) On March 25, Garrison Brewer submits payment in full. Journalize this event.
Credit Memo
A paper provided by the seller to the buyer, which decreases the total the buyer needs to pay to the seller based on the conditions of a prior bill.
Discount Period
The discount period is the timeframe during which a payment can be made with a discount for early settlement in terms of credit sales.
Merchandise Sold
The total cost of all products sold by a company during a specific period.
- Become adept at recording transactions in both the periodic and perpetual inventory systems.
- Master the technique and effects of logging sales and purchase activities, considering the elements of sales tax and service charges.
- Assess the effect of discounting sales, processing returns, and establishing payment terms on journal entries.
Verified Answer
(b) Accounts Receivable-Garrison Brewer 9,334.50 Sales 9,334.50 Cost of Merchandise Sold 6,905.00 Merchandise Inventory 6,905.00\begin{array} { | c | c | c | } \hline \text { Accounts Receivable-Garrison Brewer } & 9,334.50 & \\\hline \text { Sales } & & 9,334.50 \\\hline & & \\\hline \text { Cost of Merchandise Sold } & 6,905.00 & \\\hline \text { Merchandise Inventory } & & 6,905.00 \\\hline\end{array} Accounts Receivable-Garrison Brewer Sales Cost of Merchandise Sold Merchandise Inventory 9,334.506,905.009,334.506,905.00 (c) Customer Refunds Payable 122.50 Accounts Receivable-Garrison Brewer 122.50 Merchandise Inventory 65.00 Estimated Returns Inventory 65.00\begin{array} { | c | r | r | } \hline \text { Customer Refunds Payable } & 122.50 & \\\hline \text { Accounts Receivable-Garrison Brewer } & & 122.50 \\\hline\\\hline \text { Merchandise Inventory } & 65.00 & \\\hline \text { Estimated Returns Inventory } & & 65.00 \\\hline\end{array} Customer Refunds Payable Accounts Receivable-Garrison Brewer Merchandise Inventory Estimated Returns Inventory 122.5065.00122.5065.00 Cash 9,212.00 Accounts Receivable-Garrison Brewer 9,212.00\begin{array} { | l | l | l | } \hline \text { Cash } & 9,212.00 & \\\hline \text { Accounts Receivable-Garrison Brewer } & & 9,212.00 \\\hline\end{array} Cash Accounts Receivable-Garrison Brewer 9,212.009,212.00
Learning Objectives
- Become adept at recording transactions in both the periodic and perpetual inventory systems.
- Master the technique and effects of logging sales and purchase activities, considering the elements of sales tax and service charges.
- Assess the effect of discounting sales, processing returns, and establishing payment terms on journal entries.
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