Question

(a) On March 2, Shamrock Company sold $897,900 of merchandise to Pharoah Company on account, terms 2/10, n/30. The cost of the merchandise sold was $594,200. (b) On March 6, Pharoah Company returned $100,900 of the merchandise purchased on March 2. The cost of the merchandise returned was $67,500. (c) On March 12, Shamrock Company received the balance due from Pharoah Company.

Answer 1

Answer:

The journal entries are as follows:

(i) On March 2,

Inventory A/c Dr. $897,900

      To Accounts payable - Shamrock company    $897,900

(To record the inventory purchased on account)

(ii) On March 6,

Accounts payable - Shamrock company A/c Dr. $100,900

        To inventory A/c                                                           $100,900

(To record the balance due)