The following transactions are for Alonzo Company.

1. On December 3, Alonzo Company sold $500,000 of merchandise to Arte Co. on account. The cost of the merchandise sold was $330,000.

2. On December 8, Arte Co. returned $25,000 of merchandise purchased on December 3. The cost of the goods was $16,000.

3. On December 13, Alonzo Company received the balance due from Arte Co.

Prepare a tabular summary to record these transactions for Alonzo Company using a perpetual inventory system. (Enter negative amounts using either a negative sign preceding the number e. g. - 45 or parentheses e. g. (45).)

The Journal entries are as follows:

1. On December 3,

Accounts receivables A/c Dr. $500,000

To sales A/c $500,000

(To record the sales on account)

Cost of goods sold A/c Dr. $330,000

To merchandise inventory A/c $330,000

(To record the cost of goods sold)

2. On December 8,

Sales return and allowance A/c Dr. $25,000

To accounts receivable $25,000

(To record the Sales return and allowance)

3. On December 13,

Cash A/c Dr. $470,250

Sales discount A/c Dr. $4,750

To accounts receivables $475,000

(To record the balance due from Arte Co.)

Workings:

Sales discount = $475,000 * 0.01

= $4,750

Note: Terms 1/10 and n/30.

Cash = accounts receivables - Sales discount

= $475,000 - $4,750

= $470,250