Question

Based on the information below, illustrate the effects on the accounts and financial statements of the Seller and the Buyer. Both use a perpetual inventory system. a. Seller sells Buyer on account merchandise costing $300 for $500, terms 2/10, net 30, FOB destination. The transportation charge is $50.b. Buyer returns as defective $100 worth of the $500 merchandise received. The seller's cost is $60. If a financial statements doesn't require an entry, select "No Effect" and enter "0" in amount field.c. Buyer pays within the discount period. If a financial statements doesn't require an entry, select "No Effect" and enter "0" in amount field.

Answer 1

Answer:

Accounts Receivables  500

Sales Revenues  500

--to record sale--  

COGS  300

Inventory  300

--to record COGS of the previous sale--    

freight-out 50 debit

     cash               50 credit

--to record for freights on sale--

Sales Returns  100

Accounts Receivables  100

--to record returned goods--  

Inventory    60 debit

  COGS            60 credit

--to reord for recepcion of received good from customer--

Cash  392

Inventory  8

Accounts Receivables  400

--to record collection within discount--  

Explanation:

As the good are in good state as they are valued at $60 we re-enter them in the accounting.

Then, we solve for the outstanding balance of the sale:

500 - 100 return = 400

Then, we solve for the discount 400  x  2% = 8

Next, we get the amounr received: 400 - 8 = 492