On July 10, 2020, Flounder Music sold CDs to retailers on account and recorded sales revenue of $656,000 (cost $485,440). Flounder grants the right to return CDs that do not sell in 3 months following delivery. Past experience indicates that the normal return rate is 15%. By October 11, 2020, retailers returned CDs to Flounder and were granted credit of $70,700.Prepare Flounder’s journal entries to record (a) the sale on July 10, 2020, and (b) $70,700 of returns on October 11, 2020, and on October 31, 2020. Assume that Flounder prepares financial statement on October 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)No.DateAccount Titles and ExplanationDebitCredit(a) Jul. 10, 2020Oct. 11, 2020Oct. 31, 2020enter an account title to record sales on July 10, 2017enter a debit amountenter a credit amount enter an account title to record sales on July 10, 2017enter a debit amountenter a credit amount (To record sales) enter an account title to record cost of goods sold on July 10, 2017enter a debit amountenter a credit amount enter an account title to record cost of goods sold on July 10, 2017enter a debit amountenter a credit amount (To record cost of goods sold) (b) Jul. 10, 2020Oct. 11, 2020Oct. 31, 2020enter an account title to record sales returns on October 11, 2017enter a debit amountenter a credit amount enter an account title to record sales returns on October 11, 2017enter a debit amountenter a credit amount (To record sales returns) enter an account title to record cost of goods returned on October 11, 2017enter a debit amountenter a credit amount enter an account title to record cost of goods returned on October 11, 2017enter a debit amountenter a credit amount (To record cost of goods returned) Jul. 10, 2020Oct. 11, 2020Oct. 31, 2020enter an account title to record the transaction on October 31, 2017enter a debit amountenter a credit amount enter an account title to record the transaction on October 31, 2017enter a debit amountenter a credit amount

Cost of goods sold rate = Cost of goods soldSales revenue x 100…

Answered: On July 10, 2020, Flounder Music sold…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

On July 10, 2020, Flounder Music sold CDs to retailers on account and recorded sales revenue of $656,000 (cost $485,440). Flounder grants the right to return CDs that do not sell in 3 months following delivery. Past experience indicates that the normal return rate is 15%. By October 11, 2020, retailers returned CDs to Flounder and were granted credit of $70,700.

Prepare Flounder’s journal entries to record (a) the sale on July 10, 2020, and (b) $70,700 of returns on October 11, 2020, and on October 31, 2020. Assume that Flounder prepares financial statement on October 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

No.	Date	Account Titles and Explanation	Debit	Credit
(a)	Jul. 10, 2020Oct. 11, 2020Oct. 31, 2020	enter an account title to record sales on July 10, 2017	enter a debit amount	enter a credit amount
		enter an account title to record sales on July 10, 2017	enter a debit amount	enter a credit amount
		(To record sales)
		enter an account title to record cost of goods sold on July 10, 2017	enter a debit amount	enter a credit amount
		enter an account title to record cost of goods sold on July 10, 2017	enter a debit amount	enter a credit amount
		(To record cost of goods sold)
(b)	Jul. 10, 2020Oct. 11, 2020Oct. 31, 2020	enter an account title to record sales returns on October 11, 2017	enter a debit amount	enter a credit amount
		enter an account title to record sales returns on October 11, 2017	enter a debit amount	enter a credit amount
		(To record sales returns)
		enter an account title to record cost of goods returned on October 11, 2017	enter a debit amount	enter a credit amount
		enter an account title to record cost of goods returned on October 11, 2017	enter a debit amount	enter a credit amount
		(To record cost of goods returned)
	Jul. 10, 2020Oct. 11, 2020Oct. 31, 2020	enter an account title to record the transaction on October 31, 2017	enter a debit amount	enter a credit amount
		enter an account title to record the transaction on October 31, 2017	enter a debit amount	enter a credit amount

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.