Question

(a) On March 2, Blossom Company sold $853,600 of merchandise to Kingbird Company on account, terms 3/10, n/30. The cost of the merchandise sold was $540,300. (b) On March 6, Kingbird Company returned $114,200 of the merchandise purchased on March 2. The cost of the merchandise returned was $68,200. (c) On March 12, Blossom Company received the balance due from Kingbird Company.

Answer 1

Answer:

The answers are:

A) to record sales

Dr Accounts Receivable 853,600

Cr Sales Revenue 853,600

to record inventory

Dr Cost of Goods Sold 540,300

Cr Merchandise Inventory 540,300

B) to record sales returns

Dr Sales Returns & Allowances 114,200

Cr Accounts Receivable 114,200

to record inventory

Dr Merchandise Inventory 68,200

Cr Cost of Goods Sold 68,200

C) to record payment

Cr Cash 717,218

Cr Sales Discounts 22,182

Dr Accounts Receivable 739,400