a) Happy Customer Inc (HCI) buys merchandise from Profitable Seller CO (PSC) for $5,000. The payment terms are 2/15,N30 and shipping terms are FOB Shipping Poin The merchandise cost PSC $2,000. b) Some of the merchandise is damaged and HCI returns $200 worth of product to PSC. PSC cannot resell the merchandise. c) HCI pays the amount owed to PSC with in 11 days of the transaction. d) The responsible party pays $100 for shipping of the merchandise. REQUIRED: Prepare the journal entries (in good form) for the Seller (PSC) Prepare the journal entries (in good form) for the Buyer (HCI) Please write journals for Buyer and Seller on 2 separate pages.

a) Happy Customer Inc (HCI) buys merchandise from Profitable Seller CO (PSC) for $5,000. The payment terms are 2/15,N30 and shipping terms are FOB Shipping Poin The merchandise cost PSC $2,000. b) Some of the merchandise is damaged and HCI returns $200 worth of product to PSC. PSC cannot resell the merchandise. c) HCI pays the amount owed to PSC with in 11 days of the transaction. d) The responsible party pays $100 for shipping of the merchandise. REQUIRED: Prepare the journal entries (in good form) for the Seller (PSC) Prepare the journal entries (in good form) for the Buyer (HCI) Please write journals for Buyer and Seller on 2 separate pages.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: A store purchased canned goods at an invoice price of $2,000 and terms of 2/10, n/30. Half of the…

A: >Discount term is a payment agreement between buyer and the seller. >The buyer and seller…

Q: On February 20, 2023, LIME COrporation sold merchandise with a list price of ₱ 150,000 to Durian on…

A: DISCOUNTING TERM The 2/15 net 40 Calculation is a Way of Providing cash discount on Purchase. It…

Q: Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions. May 11…

A: Journal Entry :— It is an act of recording transactions in books of account when transaction…

Q: On June 3, 2020, Nash Company sold to Ann Mount merchandise having a sales price of $7,200 (cost…

A: Journal entry is a process of recording the business transactions in the books of accounts for the…

Q: On June 1, 2022, FDN Company sold merchandise to ABC Trading worth P40,000 with credit term of 2/10,…

A: The 2/10 n/30 is a term that is used by the company to calculate the amount of the discount under…

Q: Bridgeport Incorporated sold building supplies listed at $69500 to Bonita Construction, a preferred…

A: Gross sales includes cash sales and credit sales but the net sales is after deducting trade discount…

Q: On March 15, Monroe Sales sells $9,525.00 on account to Garrison Brewer with terms of 1/10, n/30.…

A: Calculation of sale discounts =( Sale - Sales returns and allowances) * Rate = $9,525-$125 =$9,400…

Q: A company sells goods on credit. On one sale, they sold it for $20,000 and offered a 2/10, net 30…

A: Given that, Selling price =$20,000 Discount scheme = 2/10,net 30 payment Because of complaint given…

Q: None

A: Step 1: Definition of DiscountsA discount is a way of reducing the price of an item, service, or the…

Q: On November 3, FN Trading sold merchandise for P200,000 less 10-5 on terms 3/10 2/20 n/30. Two days…

A: Discount - A discount is an amount or percentage that is reduced or subtracted from the actual…

Q: Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions.…

A: The journal entries are prepared to record the transactions on a regular basis. The purchase…

Q: Kingbird Inc. sold $16,200 of its designer tables to Santos Furniture and Design Studios on account.…

A: Sales are recorded using the gross method, so the whole amount of sales will be recorded. Under the…

Q: On January 13, 20xx, Karl Co. sold on account goods with selling price of P300,000 with terms of…

A: The term FOB shipping point refers to the free on board, which means that the sale completes when…

Q: On June 02, Talbots of Boston sold Forrest of Los Angeles $7,950 of fine clothes. Terms were 2/10…

A: A sales discount is a price drop that the seller gives in return for the buyer paying the vendor in…

Q: Shaw Company purchased 2000 units of a merchandise (called XOM) at $10 per unit from Reynold Company…

A: The discount period is the time spam within which the creditor would require to pay the amount to…

Q: Pharoah Company sells merchandise on account for $3600 to Morton Company with credit terms of 2/14,…

A: Whenever goods in the business are sold on credit, then Accounts receivable should be debited and…

Q: Walter's widgets received a bill for merchandise with a net price of $7,170.26. Walter is offered a…

A: Walter is offered a 2% cash discount if he pays within 10 days of the invoice date. The partial…

Q: On October 5, Martinez Corporation buys merchandise for resale on account from Marigold Corporation.…

A: Introduction: Under periodic inventory system instead of adjusting inventory account directly,…

Q: A company purchases merchandise for $23,000. The seller also offers credit terms of 2/10, n/30.…

A: Cost of purchase = 23000 Credit Terms = 2/10, n/30

Q: On March 30, Century Link received an invoice dated March 28 from ACME Manufacturing for 59…

A: Chain discounts encourage customers to place greater orders, which might have an impact on inventory…

Q: Flounder Company purchased merchandise on account from a supplier for $32,100, terms 2/10, n/30.…

A: a) Net purchases = $32,100 - $8,600 = $23,500 Discount on purchases = $23,500 * 2% = $470 Cash…

Q: I want to correct answer

A: To determine the cash proceeds received by the seller, we need to follow these steps: Original Sale…

Q: On June 1, Entity A sold Product XX2 for P50,000 with a cost price of P30,000. Credit terms is 2/10,…

A: Gross profit seems to be the profit a company generates after deducting all costs associated with…

Q: On Feb 1st, Blake Inc Sold merchandise to kramer corp for 1,000. Terms of sale were 2/10 n /30. On…

A: Example of Purchase term: 2/10, n/30 means if payment is made within 10 days from Invoice date, a…

Q: Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after…

A: Answer:- Refund liability:- The refund obligation is the amount of consideration that will be…

Question

**Transaction Details:**

a) Happy Customer Inc (HCI) buys merchandise from Profitable Seller CO (PSC) for $5,000. The payment terms are 2/15, N30 and shipping terms are FOB Shipping Point. The merchandise cost PSC $2,000.

b) Some of the merchandise is damaged and HCI returns $200 worth of product to PSC. PSC cannot resell the merchandise.

c) HCI pays the amount owed to PSC within 11 days of the transaction.

d) The responsible party pays $100 for shipping of the merchandise.

**Required Actions:**

- Prepare the journal entries (in good form) for the Seller (PSC).
- Prepare the journal entries (in good form) for the Buyer (HCI).
- Please write journals for Buyer and Seller on 2 separate pages.

Expert Solution

Step 1

Journal entries of Seller (PSC)

Particulars

Debit

Credit

HCI a/c

To Sales

$5000

COGS a/c

To Inventory a/c

$2000

Sales return & allowances a/c

To HCI a/c

$200

Cash a/c

Discount A/c

To HCI A/c

$4704

$96

$4800

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Don't give answer in image
6. Celeste Company provided the following transactions, among others, for the current year. 1 Sold merchandise to XYZ Company for P500,000, terms 2/10, n/30. 2 the above account to Solid Finance under the following agreement June 1 Commission based on gross amount 5%. Hold back based on gross amount 25%. 9 Granted XYZ Company a credit allowance of P50,000 for damage in the shipment. 11 XYZ Company paid in full its account to Solid Finance. 15. Final settlement was made with Solid Finance. How much was the total amount received from the factoring? а. 500,000 b. 350,000 c. 416,000 d. 375,000
Urmilaben
Webb Inc. sells $25,000 of merchandise to Jones and Sons on account, the terms were 2/10, n30. The cost of the merchandise is $12,500 Write the entry Webb would make to record this transaction. Sales $24,99
Please do not give image format
Steritech Co., a furniture wholesaler, sells merchandise to Butler Co. on account, $86,000, terms n/30. The cost of the merchandise sold is $51,600. Steritech Co. issues a credit memorandum for $5,000 for merchandise that was damaged in shipment. Butler Co. agreed to keep the damaged merchandise. Illustrate the effects on the accounts and financial statements of Butler Co. If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts. a. The purchase. Financial Statement Effects DE PA Assets + Statement of Cash Flows Balance Sheet Liabilities + Stockholders' Equity Income Statement
Bramble Corporation sells merchandise on account for $4800 to Kingbird Corporation with credit terms of 2/10, n/30. Kingbird returns $800 of merchandise that was damaged, along with a cheque to settle the account within the discount period. What is the amount of the cheque? $4704 $4000 $3920 $4800
Bonnie Corp. sells a machine to a customer for $18,000 and uses the Installment Sales Method to account for the sale. The cost of the goods was $12,400. At the date of sale, Bonnie delivers the machine and receives $4,500, with the remainder being an installment account receivable for $13,500. How much gross profit should Bonnie recognize at the date of delivery? Do not use commas, dollar symbols (e.g. $), units or spaces in your answers. For example, one thousand five hundred and twenty-three dollars should be entered as 1523. If the Canvas system inserts a comma for you, don't worry about it.