Question

Prepare the journal entries to record the following transactions on McLeena Company's books using a perpetual inventory system.(a) On March 2, Borst Company sold $800,000 of merchandise to McLeena Company on account, terms 2/10, n/30. The cost of the merchandise sold was $540,000. (b) On March 6, McLeena Company returned $140,000 of the merchandise purchased on March 2. The cost of the merchandise returned was $94,000. (c) On March 12, Borst Company received the balance due from McLeena Company.

Answer 1

Answer:

Journal Entry are given below

Explanation:

solution

Journal Entry are as

PERPETUAL INVENTORY SYSTEM

                                                                         debit                  credit

(1) March 2, Merchandise inventory               $800,000                      

                   Borst Company                                                       $800,000

               ( record Inventory purchase )

(2)  March 6,

                    Borst Company                             $140,000

                    Merchandise inventory                                           $140,000

                   ( record goods return )

(3) March 12,

                 Borst Company (800000-140000)     $660,000

                Cash  (800000-140000) ×98%                                 $646,800

                 Merchandise inventory                                               $13,200

                 (800000-140000)× 2%

                 ( record goods return )