Carla Vista Manufacturing Inc. shipped finished goods inventory with a total cost of $49,900 to Pharoah Retailing Ltd. on May 1. The agreement between the two companies was that Pharoah was to sell the product on consignment for Carla Vista Manufacturing. Carla Vista paid $5,400 in shipping costs in order to ship the merchandise. Pharoah paid a local newspaper $2,500 for advertising costs (which Carla Vista promised to reimburse). At September 30, the end of the accounting year for both companies, Pharoah had sold 75% of the merchandise for total sales of $66,900. Pharoah notified Carla Vista of the sales, retained a 20% commission, and remitted the cash due to Carla Vista. (a) Prepare the journal entries required by the above transactions on the books of Carla Vista Manufacturing. (Round answers to O decimal places, e.g. 5,275. Credit account titles are automatically indented when the 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. List all debit entries before credit entries. Use 'Revenue from Consignment Sales' for the entry.) No. Account Titles and Explanation 1. 2. 3. 4. (To record the shipment of merchandise to FFA on consignment.) (To record the payment of shipping costs.) (To record notification of consignment goods sold and receipt of cash remittance.) (To record cost of goods sold and adjust inventory.) Debit I Credit T
Carla Vista Manufacturing Inc. shipped finished goods inventory with a total cost of $49,900 to Pharoah Retailing Ltd. on May 1. The agreement between the two companies was that Pharoah was to sell the product on consignment for Carla Vista Manufacturing. Carla Vista paid $5,400 in shipping costs in order to ship the merchandise. Pharoah paid a local newspaper $2,500 for advertising costs (which Carla Vista promised to reimburse). At September 30, the end of the accounting year for both companies, Pharoah had sold 75% of the merchandise for total sales of $66,900. Pharoah notified Carla Vista of the sales, retained a 20% commission, and remitted the cash due to Carla Vista. (a) Prepare the journal entries required by the above transactions on the books of Carla Vista Manufacturing. (Round answers to O decimal places, e.g. 5,275. Credit account titles are automatically indented when the 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. List all debit entries before credit entries. Use 'Revenue from Consignment Sales' for the entry.) No. Account Titles and Explanation 1. 2. 3. 4. (To record the shipment of merchandise to FFA on consignment.) (To record the payment of shipping costs.) (To record notification of consignment goods sold and receipt of cash remittance.) (To record cost of goods sold and adjust inventory.) Debit I Credit T
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Carla Vista Manufacturing Inc. shipped finished goods inventory with a total cost of $49,900 to Pharoah Retailing Ltd. on May 1. The
agreement between the two companies was that Pharoah was to sell the product on consignment for Carla Vista Manufacturing. Carla
Vista paid $5,400 in shipping costs in order to ship the merchandise. Pharoah paid a local newspaper $2,500 for advertising costs
(which Carla Vista promised to reimburse). At September 30, the end of the accounting year for both companies, Pharoah had sold
75% of the merchandise for total sales of $66,900. Pharoah notified Carla Vista of the sales, retained a 20% commission, and remitted
the cash due to Carla Vista.
(a)
Prepare the journal entries required by the above transactions on the books of Carla Vista Manufacturing. (Round answers to O
decimal places, e.g. 5,275. Credit account titles are automatically indented when the 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. List all debit entries before credit entries. Use 'Revenue from
Consignment Sales' for the entry.)
No. Account Titles and Explanation
1.
2.
3.
4.
(To record the shipment of merchandise to FFA on
consignment.)
(To record the payment of shipping costs.)
(To record notification of consignment goods sold and receipt
of cash remittance.)
(To record cost of goods sold and adjust inventory.)
Debit
I
Credit
T
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