Please see below. I need help with the parts in the red boxes. Prepare the journal entries to record the following transactions on Pharoah Company's books using a perpetual inventory system. (Ifno entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented whenamount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)(a)On March 2, Pharoah Company sold $897,900 of merchandise to Cullumber Company, terms 2/10, n/30. The cost of themerchandise sold was $594,200.On March 6, Cullumber Company returned $100,900 of the merchandise purchased on March 2. The cost of themerchandise returned was $67,500.(b)(c)On March 12, Pharoah Company received the balance due from Cullumber Company.DebitCreditDateAccount Titles and Explanation897,900March 2Inventory897,900Accounts Payable(To record sale of merchandise)100,900Accounts PayableMarch 6100,900InventoryMarch 6No EntryNo Entry(To record return of merchandise)No EntryMarch 12No Entry (To record return of merchandise)March 12No EntryNo Entry797,000March 12Accounts Payable781,060Cash15,940Inventory

Answered: Prepare the journal entries to record…

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter10: Cash Receipts And Cash Payments

Section: Chapter Questions

Problem 5E

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Please see below. I need help with the parts in the red boxes.

Prepare the journal entries to record the following transactions on Pharoah Company's books using a perpetual inventory system. (If
no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when
amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
(a)
On March 2, Pharoah Company sold $897,900 of merchandise to Cullumber Company, terms 2/10, n/30. The cost of the
merchandise sold was $594,200.
On March 6, Cullumber Company returned $100,900 of the merchandise purchased on March 2. The cost of the
merchandise returned was $67,500.
(b)
(c)
On March 12, Pharoah Company received the balance due from Cullumber Company.
Debit
Credit
Date
Account Titles and Explanation
897,900
March 2
Inventory
897,900
Accounts Payable
(To record sale of merchandise)
100,900
Accounts Payable
March 6
100,900
Inventory
March 6
No Entry
No Entry
(To record return of merchandise)
No Entry
March 12
No Entry

(To record return of merchandise)
March 12
No Entry
No Entry
797,000
March 12
Accounts Payable
781,060
Cash
15,940
Inventory

Expert Solution

Step 1

The systematical recording of all monetary business transactions is called a journal entry. They are listed in chronological order based on the date of the incident. Adjusting entries, closing entries, and frequent entries are examples of diary entries.

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