Answer:
JOURNAL ENTRY
a) 2 Mar Debit Accounts receivable $946000, Credit Revenue $946000
Debit Cost of Sale $538100, Credit Inventory $538100
b) 5 Mar Debit Sales return $ 113000, Credit Account receivables $113000
Debit inventory $63100, credit Cost of Sales $63100
c) 12 Mar Debit bank $816340 , Debit discount allowed $16660 , Credit Accounts receivable $833000
The balance due is $946000-$113000=$833000*98%=$816340 net of discount.
Revenue to be recognized = $833000 net of returns
cost of sales = $538100-$63100 = $475000
gross profit = $358000
Explanation:
COMPLETE QUESTION ( I will use the dates in the complete question)
Question:
Prepare the journal entries to record the following transactions on Sheridan Company's books using a perpetual Inventory system. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
(a) On March 2, Crane Company sold $946,00D of merchandise to Sheridan Company, terms 2/10, n/30. The cost of the merchandise sold was $538,100
(b) On March 5, Sheridan Company returned $113,000 of the merchandise purchased on March 2. The cost of the merchandise returned was $63,100.
(c) (c)On March 12, Crane Company received the balance due from Sheridan Company.
