Answer:
(a)
Dr Accounts Receivable $635,000
Cr 7/10/2020 Sales Revenue $635,000
Dr Cost of Goods Sold $508,000
Cr Inventory $508,000
(b)
Dr Sales Returns & Allowances $82,700
Cr 10/11/2020.Accounts Receivable $82,700
Dr Returned Inventory $66,160
Cr Cost of Goods Sold $66,160
10/31/2020 No entries are needed as the return period has expired.
Explanation:
(a)
Dr Accounts Receivable $635,000
Cr 7/10/2020 Sales Revenue $635,000
Dr Cost of Goods Sold $508,000
Cr Inventory $508,000
(b)
Dr Sales Returns & Allowances $82,700
Cr 10/11/2020.Accounts Receivable $82,700
Dr Returned Inventory $66,160
Cr Cost of Goods Sold $66,160
($508,000 / $635,000) x $82,700= $66,160
10/31/2020 No entries are needed as the return period has expired.
