6. During 2019, Reed Corporation sold merchandise for a total of $900,000. The cost of merchandise toReed was $675,000. Reed offers credit terms of 1/10, n/30 to encourage early payment. At year-end,there are $22,500 of sales still eligible for the 1% discount. Reed believes that all of the companies willpay within the discount period to receive the 1% discount. Assume Reed's fiscal year is December 31.Reed's adjusting journal entry will include:A) A debit to Sales Discounts for $225B) A credit to Allowance for Sales Discounts for $2,250C) A debit to Sales Discounts for $2,050D) A credit to Sales Discounts for $225E) No adjusting journal entry is required. Discount will be recognized when payment is received.

A sales discount represents a reduction, not in the selling price of the product or service, but in…

Answered: 6. During 2019, Reed Corporation sold…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On July 10, 2020, Bridgeport Music sold CDs to retailers on account and recorded sales revenue of $764.000 (cost $588,280) Bridgeport grants the right to return CDs that do not sell in 3 months following delivery, Past experience indicates that the normal return rate is 15%. By October 11, 2020, retailers returned CDs to Bridgeport and were granted credit of $78,200. Prepare Bridgeport's journal entries to record (a) the sale on July 10, 2020, and (b) $78,200 of returns on October 11, 2020, and on October 31, 2020. Assume that Bridgeport prepares financial statement on October 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry for the account titles and enter O for the amounts.) Account Titles and Explanation No. € (b) Date (To record sales) (To record cost of goods sold) (To record sales) (To record cost of goods sold) (To record sales returns) (To record cost of goods returned) Debit…
On July 10, 2020, Cheyenne Music sold CDs to retailers on account and recorded sales revenue of $658,000 (cost $506, 660). Cheyenne grants the right to return CDs that do not sell in 3 months following delivery. Past experience indicates that the normal return rate is 15%. By October 11, 2020, retailers returned CDs to Cheyenne and were granted credit of $80,000. Prepare Cheyenne's journal entries to record (a) the sale on July 10, 2020, and (b) $80,000 of returns on October 11, 2020, and on October 31, 2020. Assume that Cheyenne prepares financial statement on October 31, 2020. (To record sales) (To record cost of goods) (To record sales returns) (To record cost of goods returned)
Rangling Company, buys goods from A.J. Stop Company that gives sales terms of 2.5/10, net 30 days. Rangling has annual gross purchases of $1,000,000. Calculate the maximum amount of costly trade credit that Rangling could get, assuming it abides by the A.J.’s credit terms? (Assume a 365-day year.)
71. Sbject :- Accounting
Moon Co. sells food blenders. During 2019, Moon made 37,000 blenders at an average cost of $80. It sold out 25,000 food blenders at an average price of $130. Moon provides a 2-year warranty for each blender sold and estimates 9% of blenders will be returned for warranty with an estimated cost of $36 each. By the end of 2019, Moon has spent $44,000 servicing the warranty repairs. All the above transactions have been settled in cash. During 2019, Moon has 50 employees who work 5-day per week and get paid each other Friday. Salaries of $324,000 and payroll expense of $37,000 have been paid until December 22. Since the business grows quickly, Moon needs cash to expand. By the end of 2018, the Board of Directors authorized the management to issue 10-year bonds with a par value of $3,000,000, annual contract interest rate of 8% and semi-annual interest payments. Moon chose to use the straight-line method to amortize discount or premium on its bonds. On January 1, 2019, management…
On July 10, 2020, Buffalo Music sold CDs to retailers on account and recorded sales revenue of $740,000 (cost $621,600). Buffalo grants the right to return CDs that do not sell in 3 months following delivery. Past experience indicates that the normal return rate is 15%. By October 11, 2020, retailers returned CDs to Buffalo and were granted credit of $85,500.Prepare Buffalo’s journal entries to record (a) the sale on July 10, 2020, and (b) $85,500 of returns on October 11, 2020, and on October 31, 2020. Assume that Buffalo prepares financial statement on October 31, 2020.

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