Prepare the journal entries to record the following transactions on Sandhill Company's books using a perpetual inventory system. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) (a) On March 2, Sandhill Company sold $887,400 of merchandise to Teal Mountain Company on account, terms 2/10, n/30. The cost of the merchandise sold was $571,700. (b) On March 6, Teal Mountain Company returned $103,200 of the merchandise purchased on March 2. The cost of the merchandise returned was $62,500. (c) On March 12, Sandhill Company received the balance due from Teal Mountain Company.

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Business

Kenneth Fitzgerald

27 February, 05:51

Prepare the journal entries to record the following transactions on Sandhill Company's books using a perpetual inventory system. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) (a) On March 2, Sandhill Company sold $887,400 of merchandise to Teal Mountain Company on account, terms 2/10, n/30. The cost of the merchandise sold was $571,700. (b) On March 6, Teal Mountain Company returned $103,200 of the merchandise purchased on March 2. The cost of the merchandise returned was $62,500. (c) On March 12, Sandhill Company received the balance due from Teal Mountain Company.

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Reyna Lamb · Answer 1

a. On March 2

Accounts receivable A/c Dr $$887,400

To sales A/c $$887,400

(Being inventory sold at sale price)

Cost of goods sold A/c Dr $

To Merchandise inventory A/c $571,700

(Being merchandise sold at cost price)

b. On March 8

Sales return and allowance A/c Dr $103,200

To Accounts receivable $103,200

(Being sales return is recorded)

Merchandise inventory A/c Dr $62,500

To Cost of goods sold A/c $62,500

(Being sales return is recorded)

c. On March 12

Cash A/c Dr $768,516

Sales discounts A/c Dr $15,684

To Accounts receivable A/c $784,200

(Being cash received recorded)

The computation of the balance due is shown below:

= Sale of inventory - returned goods

= $887,400 - $103,200

= $784,200

And the discount = $784,200 * 2% = 15,684