E5-13A. (Learning Objectives 1, 2: Apply GAAP for proper revenue recognition; accountfor sales allowances) Lakewood Jewelry sells to retailers who then resell the products.Lakewood does not offer sales discounts for early payment; it asks that customers pay infull within 15 days or at the point of sale with a credit card. The company had the followingselected transactions during July:July 2July 3July 16July 17July 19July 30Sold $50,000 of merchandise to Oceanside Jewels on account.Sold $10,000 of merchandise to Brilliant Crystals, which paid by credit card.The credit card company charges Lakewood a fee of 2% on credit card sales.Oceanside Jewels paid the balance of what it owed for the purchase on July 2.Sold $65,000 of merchandise to Precious Stones on account.Precious Stones noticed that some of the merchandise received was damaged, so itreturned $5,000 worth of merchandise to Lakewood.Precious Stones paid the balance of what it owed for the purchase on July 17.Requirements1. Journalize Lakewood’s July transactions. (You do not need to record the cost of goods sold.)2. Calculate the gross sales revenue for the month.
E5-13A. (Learning Objectives 1, 2: Apply GAAP for proper revenue recognition; account
for sales allowances) Lakewood Jewelry sells to retailers who then resell the products.
Lakewood does not offer sales discounts for early payment; it asks that customers pay in
full within 15 days or at the point of sale with a credit card. The company had the following
selected transactions during July:
July 2
July 3
July 16
July 17
July 19
July 30
Sold $50,000 of merchandise to Oceanside Jewels on account.
Sold $10,000 of merchandise to Brilliant Crystals, which paid by credit card.
The credit card company charges Lakewood a fee of 2% on credit card sales.
Oceanside Jewels paid the balance of what it owed for the purchase on July 2.
Sold $65,000 of merchandise to Precious Stones on account.
Precious Stones noticed that some of the merchandise received was damaged, so it
returned $5,000 worth of merchandise to Lakewood.
Precious Stones paid the balance of what it owed for the purchase on July 17.
Requirements
1. Journalize Lakewood’s July transactions. (You do not need to record the cost of goods sold.)
2. Calculate the gross sales revenue for the month.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
