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The following transactions are for Splish Brothers Company.

1. On December 3, Splish Brothers Company sold $515,600 of merchandise to Sunland Co., on account, terms 3/10, n/30. The cost of the merchandise sold was $320,500.
2. On December 8, Sunland Co. was granted an allowance of $24,000 for merchandise purchased on December 3.
3. On December 13, Splish Brothers Company received the balance due from Sunland Co.

Required:
Prepare the journal entries to record these transactions on the books of Splish Brothers.

Respuesta :

Answer and Explanation:

The journal entries are shown below:

On Dec 3

Account receivable $515,600  

         To Sales revenue $515,600

(Being the sale of merchandise on account is recorded)  

Cost of goods sold $320,500  

          To Inventory $320,500

(Being the cost of merchandise sold on account)  

On Dec 8

Sales allowance $24,000  

      To Account receivable $24,000

On Dec 13

Cash (491600 × 97%) $476,852  

Sales discount $14,748  

         To Account receivable ($515,600  - $24,000)  $491,600

(Being the cash received is recorded)