Prepare the journal entries to record the following transactions on Markowitz Company's books using a perpetual inventory system.

On February 6, Markowitz Company sold $75,000 of merchandise to the Lyman Company, terms 2/10, net / 30. The cost of the merchandise sold was $50,000. On February 8, the Lyman Company returned $10,000 of the merchandise purchased on February 6. The cost of the merchandise returned was $5,000. On February 16 Markowitz Company received the balance due from the Lyman Company.

Question

Business

Kael Cook

5 June, 05:40

Prepare the journal entries to record the following transactions on Markowitz Company's books using a perpetual inventory system.

On February 6, Markowitz Company sold $75,000 of merchandise to the Lyman Company, terms 2/10, net / 30. The cost of the merchandise sold was $50,000. On February 8, the Lyman Company returned $10,000 of the merchandise purchased on February 6. The cost of the merchandise returned was $5,000. On February 16 Markowitz Company received the balance due from the Lyman Company.

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Answers (1)

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Kaleb Bradley · Answer 1

Journal entries for Markowitz Company's books are given below

Explanation:

February 6

Debit Credit

Receivable $75000

Sales $75000

Debit Credit

Cost of good sold $50,000

Inventory $50,000

February 8

Debit Credit

Sales Return $10,000

Receivable $10,000

Debit Credit

Inventory $5,000

Cost of good sold $5,000

February 16

Debit Credit

Cash $63,700

Sale discount $1300

Receivable 65,000

Workings for february 16

Discount = 65,000 x 2% = 1300

Cash = 65000 x 98% = 63,700

Account Receivable = 75,000 - 10,000 = 65,000