Question

Prepare the journal entries to record the following transactions on Cullumber 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 amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
(a) On March 2, Marin Company sold $928,800 of merchandise to Cullumber Company on account, terms 2/10, n/30. The cost of the merchandise sold was $511,500.
(b) On March 6, Cullumber Company returned $108,400 of the merchandise purchased on March 2. The cost of the merchandise returned was $60,800.
(c) On March 12, Marin Company received the balance due from Cullumber Company.

Answer 1

Answer: See explanation

Explanation:

Rhe journal entry will be recorded as:

a. March 2:

Debit: Accounts Receivable = 928800

Credit: Sales = 928800

Debit: Cost of Goods Sold = 511500

Credit: Merchandise Inventory = 511500

b. March 6:

Debit: Sales Returns and Allowances = 108400

Credit: Accounts Receivable = 108400

Debit: Merchandise Inventory = 60800

Credit: Cost of Goods Sold = 60800

c. March 12:

Debit: Cash = 803992

Debit: Sales discount = 820400 × 2% = 16408

Credit: Account receivable = 820400