Question

Roeher Company sold $9,000 of its specialty shelving to Elkins Office Supply Co. on account. Prepare the entries when (a) Roeher makes the sale, (b) Roeher grants an allowance of $700 when some of the shelving does not meet exact specifications but still could be sold by Elkins, and (c) at year-end; Roeher estimates that an additional $200 in allowances will be granted to Elkins.

Answer 1

Answer:

1. Dr Accounts Receivable 9,000

Cr Sales Revenue 9,000

2. Dr Allowance for sales returns and allowances 700

Cr Accounts Receivable 700

3. Dr Allowance for sales returns and allowances 200

Cr Accounts Receivable 200

Explanation:

Preparation of the journal entry

1. Preparation of the entries when Roeher makes the sale

Dr Accounts Receivable 9,000

Cr Sales Revenue 9,000

2. Preparation of the entries when Roeher grants an allowance of the amount of $700

Dr Allowance for sales returns and allowances 700

Cr Accounts Receivable 700

3. Preparation of the entries when Roeher estimated that an additional amount of $200 in allowances will be granted to Elkins

Dr Allowance for sales returns and allowances 200

Cr Accounts Receivable 200