Merchandise with a list price of $4,200 and costing $2,300 is sold on account, subject to the following terms: FOB destination, 2/10, n/30. The seller prepays the freight costs of $85. Prior to payment for the goods, the seller issues a credit memo for $750 to the customer for merchandise costing $425 that is returned. Payment is received within the discount period. The company uses a perpetual inventory system. Record the requested journal entries of the seller (below) using the information above. (a) The initial sale of merchandise, recognizing both the sale and cost of merchandise sold.
Merchandise with a list price of $4,200 and costing $2,300 is sold on account, subject to the following terms: FOB destination, 2/10, n/30. The seller prepays the freight costs of $85. Prior to payment for the goods, the seller issues a credit memo for $750 to the customer for merchandise costing $425 that is returned. Payment is received within the discount period. The company uses a perpetual inventory system. Record the requested journal entries of the seller (below) using the information above. (a) The initial sale of merchandise, recognizing both the sale and cost of merchandise sold.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Merchandise with a list price of $4,200 and costing $2,300 is sold on account, subject to the following terms: FOB destination, 2/10, n/30. The seller
prepays the freight costs of $85. Prior to payment for the goods, the seller issues a credit memo for $750 to the customer for merchandise costing $425
that is returned. Payment is received within the discount period. The company uses a perpetual inventory system. Record the requested journal entries of
the seller (below) using the information above.
(a) The initial sale of merchandise, recognizing both the sale and cost of merchandise sold.
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