Explanation (1) Describe the sale of merchandise inventory on account. Date Accounts and Explanation Debit ($) Credit ($) Accounts Receivable 41,160 To Sales Revenue 41,160 (To record the sale of inventory on account) Table (1) Accounts Receivable is an asset and it is increased by $41,160. Therefore, debit accounts receivable with $41,160. Sales revenue is revenue and it increases the value of equity by $41,160. Therefore, credit sales revenue with $41,160. (2) Describe the entry for cost of goods sold. Date Accounts and Explanation Debit ($) Credit ($) Cost of Merchandise Sold 25,200 Merchandise Inventory 25,200 (To record the cost of goods sold) Table (2) Cost of merchandise sold is an expense account and it decreases the value of equity by $25,200. Therefore, debit cost of merchandise sold account with $25,200. Merchandise Inventory is an asset and it is decreased by $25,200. Therefore, credit inventory account with $25,200. (3) Describe the journal entry for sales return. Date Account Title and Explanation Post Ref. Debit ($) Credit ($) Customer Refunds Payable 1,960 Accounts Receivable 1,960 (To record sales returns) Table (3) Customer refunds payable is a liability account and decreased by $1,960...

Working Papers, Chapters 1-17 for Warren/Reeve/Duchac's Accounting, 26th and Financial Accounting, 14th

26th Edition

ISBN: 9781305392373

Author: Carl Warren, Jim Reeve, Jonathan Duchac

Publisher: Cengage Learning

See similar textbooks

Concept explainers

The Effect Of Prepaid Taxes On Assets And Liabilities

Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can resu…

Final Accounts

Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.

Ledger Posting

A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the a…

Trial Balance and Final Accounts

In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately…

Adjustment Entries

At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial repor…

Videos

Question

Chapter 6, Problem 6.11EX

To determine

Sales is an activity of selling the merchandise inventory of a business.

To Describe: The sale of merchandise inventory on account.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 6, Problem 6.10EX

Chapter 6, Problem 6.12EX

Students have asked these similar questions

Solve fastky

Calculate felix trading co.'s accounts receivable balance

Austin Company uses a job order cost accounting system. The company's executives estimated that direct labor would be $8,400,000 (840,000 hours at $10/hour) and that factory overhead would be $5,400,000 for the current period. At the end of the period, the records show that there had been 300,000 hours of direct labor and $5,100,000 of actual overhead costs. Using direct labor hours as a base, what was the predetermined overhead allocation rate?

Chapter 6 Solutions

Working Papers, Chapters 1-17 for Warren/Reeve/Duchac's Accounting, 26th and Financial Accounting, 14th

Ch. 6 - What distinguishes a merchandising business from a...Ch. 6 - Can a business earn a gross profit but incur a net...Ch. 6 - The credit period during which the buyer of...Ch. 6 - Prob. 4DQ Ch. 6 - Prob. 5DQ Ch. 6 - Prob. 6DQ Ch. 6 - Who bears the freight when the terms of sale are...Ch. 6 - Name four accounts that would normally appear in...Ch. 6 - Audio Outfitter Inc., which uses a perpetual...Ch. 6 - Assume that Audio Outfitter Inc. in Discussion...

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.

Sales is an activity of selling the merchandise inventory of a business. To Describe: The sale of merchandise inventory on account.

Solution Summary: The author explains that sales is an activity of selling the merchandise inventory of a business.