During its first year of operations, Drone Zone Corporation (DZC) bought goods from a manufacturer on account at a cost of $53,000. DZC returned $8,300 of this merchandise to the manufacturer for credit on its account. DZC then sold $41,000 of the remaining goods at a selling price of $67,600. DZC records sales returns as they occur and then records estimated additional returns at year-end. During the year, customers returned goods and were issued gift cards equal in amount to the initial selling price of $7,100. These goods were in perfect condition, so they were put back into DZC's inventory at their cost of $4,300. At year-end, DZC estimated $9,310 of current-year merchandise sales would be returned to DZC in the following year, DZC estimates $5,600 as its cost of this merchandise. Prepare journal entries to record DZC's transactions and estimates, assuming DZC uses a perpetual inventory system. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

During its first year of operations, Drone Zone Corporation (DZC) bought goods from a manufacturer on account at a cost of $53,000. DZC returned $8,300 of this merchandise to the manufacturer for credit on its account. DZC then sold $41,000 of the remaining goods at a selling price of $67,600. DZC records sales returns as they occur and then records estimated additional returns at year-end. During the year, customers returned goods and were issued gift cards equal in amount to the initial selling price of $7,100. These goods were in perfect condition, so they were put back into DZC's inventory at their cost of $4,300. At year-end, DZC estimated $9,310 of current-year merchandise sales would be returned to DZC in the following year, DZC estimates $5,600 as its cost of this merchandise. Prepare journal entries to record DZC's transactions and estimates, assuming DZC uses a perpetual inventory system. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

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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