Vaughn Corporation shipped $18,400 of merchandise on consignment to Gooch Company. Vaughn paid freight costs of $2,000. Gooch Company paid $540 for local advertising, which is reimbursable from Vaughn. By year-end, 63% of the merchandise had been sold for $21,200. Gooch notified Vaughn, retained a 9% commission, and remitted the cash due to Vaughn.
Vaughn Corporation shipped $18,400 of merchandise on consignment to Gooch Company. Vaughn paid freight costs of $2,000. Gooch Company paid $540 for local advertising, which is reimbursable from Vaughn. By year-end, 63% of the merchandise had been sold for $21,200. Gooch notified Vaughn, retained a 9% commission, and remitted the cash due to Vaughn.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Vaughn Corporation shipped $18,400 of merchandise on consignment to Gooch Company. Vaughn paid freight costs of $2,000. Gooch
Company paid $540 for local advertising, which is reimbursable from Vaughn. By year-end, 63% of the merchandise had been sold for
$21,200. Gooch notified Vaughn, retained a 9% commission, and remitted the cash due to Vaughn.
Prepare Vaughn's journal entry when the cash is received. (Round answers to O decimal places, e.g. 1,525. 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 O for the amounts.)
Account Titles and Explanation
Debit
Credit
Cash
Commission Expense
Advertising Expense
(To record the cash remitted to Vaughn.)
(To record the cost of inventory sold on consignment.)
18752
1908
540
21200
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