Blossom Manufacturing Inc. shipped finished goods inventory with a total cost of $56,700 to Wildhorse Retailing Ltd. on May 1. The agreement between the two companies was that Wildhorse was to sell the product on consignment for Blossom Manufacturing. Blossom paid $4,800 in shipping costs in order to ship the merchandise. Wildhorse paid a local newspaper $1,500 for advertising costs (which Blossom promised to reimburse). At September 30, the end of the accounting year for both companies, Wildhorse had sold 75% of the merchandise for total sales of $60,000. Wildhorse notified Blossom of the sales, retained a 20% commission, and remitted the cash due to Blossom. (a) Prepare the journal entries required by the above transactions on the books of Blossom 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.)
Blossom Manufacturing Inc. shipped finished goods inventory with a total cost of $56,700 to Wildhorse Retailing Ltd. on May 1. The agreement between the two companies was that Wildhorse was to sell the product on consignment for Blossom Manufacturing. Blossom paid $4,800 in shipping costs in order to ship the merchandise. Wildhorse paid a local newspaper $1,500 for advertising costs (which Blossom promised to reimburse). At September 30, the end of the accounting year for both companies, Wildhorse had sold 75% of the merchandise for total sales of $60,000. Wildhorse notified Blossom of the sales, retained a 20% commission, and remitted the cash due to Blossom. (a) Prepare the journal entries required by the above transactions on the books of Blossom 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Blossom Manufacturing Inc. shipped finished goods inventory with a total cost of $56,700 to Wildhorse Retailing Ltd. on May 1. The
agreement between the two companies was that Wildhorse was to sell the product on consignment for Blossom Manufacturing.
Blossom paid $4,800 in shipping costs in order to ship the merchandise. Wildhorse paid a local newspaper $1,500 for advertising costs
(which Blossom promised to reimburse). At September 30, the end of the accounting year for both companies, Wildhorse had sold
75% of the merchandise for total sales of $60,000. Wildhorse notified Blossom of the sales, retained a 20% commission, and remitted
the cash due to Blossom.
(a)
Prepare the journal entries required by the above transactions on the books of Blossom 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
Credit
170
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