The following merchandise transactions occured in december. Both companies use a perpetual inventory systemDec. 3 Blue Spruce Ltd. Sold goods to swifty corp. For $77,800,terms n/15, FOB shipping point. The inventory had cost blue spruce $41,400. Blue Spruce's management expected a return rate of 3% based on prior experience.Dec. 7 Shipping costs of $1,080 were paid by the appropriate companyDec. 8 Swifty returned unwanted merchandise to blue spruce. The returned merchandise has a sales price of $2,400, and a cost of $1,280. It was restored to inventory.Dec 11 Blue Spruce received the balance due from swifty. e to searchDec. 7Dec. 8 VDec. 8Dec/11(To record cost of merchandise sold)No EntryNo EntrySales Returns and AllowancesAccounts Receivable(To record return of goods)InventoryCost of Goods Sold(To record cost of merchandise returned)CashAccounts Receivable담24001280077800CD B7542423°C Sunny e to searchDateDec. 3Dec. 3Dec: 7Account Titles and ExplanationAccounts ReceivableSalesEstimated Inventory Returns(To record credit sale)Cost of Goods SoldEstimated Inventory ReturnsInventory(To record cost of merchandise sold)No EntryDebit77,800426421242Credit75442623°C Sunny^ G

A journal entry is a form of accounting entry that is used to report a business transaction in a…

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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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The following merchandise transactions occured in december. Both companies use a perpetual inventory system Dec. 3 Blue Spruce Ltd. Sold goods to swifty corp. For $77,800,terms n/15, FOB shipping point. The inventory had cost blue spruce $41,400. Blue Spruce's management expected a return rate of 3% based on prior experience. Dec. 7 Shipping costs of $1,080 were paid by the appropriate company Dec. 8 Swifty returned unwanted merchandise to blue spruce. The returned merchandise has a sales price of $2,400, and a cost of $1,280. It was restored to inventory. Dec 11 Blue Spruce received the balance due from swifty.

e to search
Dec. 7
Dec. 8 V
Dec. 8
Dec/11
(To record cost of merchandise sold)
No Entry
No Entry
Sales Returns and Allowances
Accounts Receivable
(To record return of goods)
Inventory
Cost of Goods Sold
(To record cost of merchandise returned)
Cash
Accounts Receivable
담
2400
1280
0
77800
CD B
754
24
23°C Sunny

e to search
Date
Dec. 3
Dec. 3
Dec: 7
Account Titles and Explanation
Accounts Receivable
Sales
Estimated Inventory Returns
(To record credit sale)
Cost of Goods Sold
Estimated Inventory Returns
Inventory
(To record cost of merchandise sold)
No Entry
Debit
77,800
42642
1242
Credit
754
426
23°C Sunny
^ G

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