Explanation Sales is an activity of selling the merchandise inventory of a business. Record the journal entry for the sale of inventory on account. Date Accounts and Explanation Debit ($) Credit ($) November 3 Accounts Receivable 2,460 To Sales Revenue 2,460 (To record the sale of inventory on account) Table (1) Justification Accounts Receivable is an asset and it is increased by $2,460. Therefore, debit account receivable with $2,460. Sales revenue is revenue and it increases the value of equity by $2,460. Therefore, credit sales revenue with $2,460. Record the journal entry for cost of goods sold. Date Accounts and Explanation Debit ($) Credit ($) November 3 Cost of Goods Sold 1,353 (1) Merchandise Inventory 1,353 (To record the cost of goods sold) Table (2) Working Notes: Calculate cost of goods sold amount. Accounts receivable due to sales = $2,460 Cost of goods sold percentage = 55% Cost of goods sold = { Accounts receivable due to sales × Percentage of cost of goods sold } = $ 2 , 460 × 55 % = $1,353 (1) Justification Cost of goods sold is an expense account and it decreases the value of equity by $1,353. Therefore, debit cost of goods sold account with $1,353. Merchandise Inventory is an asset and it is decreased by $1,353. Therefore, credit inventory account with $1,353. Record the journal entry for freight charges paid for customer. Date Account Title and Explanation Post Ref. Debit ($) Credit ($) November 3 Accounts Receivable 90 Cash 90 (To record the payment of freight charges) Table (3) Justification: Delivery expense is an expense and it is increased by $90. Therefore, debit delivery expense account with $90. Cash is an asset and it is decreased by $90. Therefore, credit cash account with $90. Record the journal entry for sales return. Journal Entry Date Account Title and Explanation Post Ref. Debit ($) Credit ($) November 7 Sales Returns and Allowances 360 Accounts Receivable 360 (To record sales returns) Table (4) Justification: Sales return and allowance is an expense account and it decreases the value of equity by $360. Therefore, debit sales returns and allowances account with $360. Accounts Receivable is an asset and it is decreased by $360. Therefore, credit account receivable with $360. Record the journal entry for the return of the merchandise. Date Accounts and Explanation Debit ($) Credit ($) November 7 Inventory 198 (2) Cost of Goods Sold 198 (To record the return of the merchandise) Table (5) Working Notes: Calculate cost of goods sold amount

Financial Accounting, Student Value Edition (4th Edition)

4th Edition

ISBN: 9780134114811

Author: Robert Kemp, Jeffrey Waybright

Publisher: PEARSON

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Chapter 4, Problem 18AE

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Record the sale transactions of Incorporation B.

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Chapter 4, Problem 17AE

Chapter 4, Problem 19AE

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Chapter 4 Solutions

Financial Accounting, Student Value Edition (4th Edition)

Ch. 4 - Prob. 1DQ Ch. 4 - What are some reasons why a merchandiser might...Ch. 4 - Why do businesses use subsidiary ledgers?Ch. 4 - Prob. 4DQ Ch. 4 - How many accounts are involved in recording the...Ch. 4 - Prob. 6DQ Ch. 4 - Prob. 7DQ Ch. 4 - Prob. 8DQ Ch. 4 - What is the difference between a single-step and...Ch. 4 - Prob. 10DQ

Ch. 4 - Which account does a merchandiser use that a...Ch. 4 - The two main inventory accounting systems are the...Ch. 4 - Prob. 3SC Ch. 4 - Prob. 4SC Ch. 4 - Prob. 5SC Ch. 4 - Prob. 6SC Ch. 4 - Prob. 7SC Ch. 4 - Prob. 8SC Ch. 4 - Prob. 9SC Ch. 4 - Prob. 10SC Ch. 4 - Prob. 11SC Ch. 4 - Prob. 12SC Ch. 4 - Prob. 1SE Ch. 4 - Prob. 2SE Ch. 4 - Prob. 3SE Ch. 4 - Prob. 4SE Ch. 4 - Prob. 5SE Ch. 4 - Prob. 6SE Ch. 4 - Prob. 7SE Ch. 4 - Prob. 8SE Ch. 4 - Prob. 9SE Ch. 4 - Prob. 10SE Ch. 4 - Prob. 11SE Ch. 4 - Prob. 12SE Ch. 4 - Prob. 13SE Ch. 4 - Prob. 14AE Ch. 4 - Prob. 15AE Ch. 4 - Prob. 16AE Ch. 4 - Prob. 17AE Ch. 4 - Prob. 18AE Ch. 4 - Prob. 19AE Ch. 4 - Prob. 20AE Ch. 4 - Prob. 21AE Ch. 4 - Prob. 22AE Ch. 4 - Prob. 23AE Ch. 4 - Prob. 24AE Ch. 4 - Prob. 25BE Ch. 4 - Prob. 26BE Ch. 4 - Prob. 27BE Ch. 4 - Prob. 28BE Ch. 4 - Prob. 29BE Ch. 4 - Prob. 30BE Ch. 4 - Prob. 31BE Ch. 4 - Prob. 32BE Ch. 4 - Prob. 33BE Ch. 4 - Prob. 34BE Ch. 4 - Prob. 35BE Ch. 4 - Prob. 36AP Ch. 4 - Prob. 37AP Ch. 4 - Prob. 38AP Ch. 4 - Prob. 39AP Ch. 4 - Prob. 40AP Ch. 4 - Prob. 41AP Ch. 4 - Prob. 42AP Ch. 4 - Prob. 43BP Ch. 4 - Prob. 44BP Ch. 4 - Prob. 45BP Ch. 4 - Prob. 46BP Ch. 4 - Prob. 47BP Ch. 4 - Prob. 48BP Ch. 4 - Prob. 49BP Ch. 4 - Prob. 1CE Ch. 4 - Prob. 1CP Ch. 4 - Prob. 1CFSAP Ch. 4 - Prob. 1EIA Ch. 4 - Prob. 2EIA Ch. 4 - Prob. 1FA Ch. 4 - Prob. 1IA Ch. 4 - Prob. 1SBA Ch. 4 - Prob. 1WC

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