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3 years ago

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On May 10, 2020, Marin Co. enters into a contract to deliver a product to Greig Inc. on June 15, 2020. Greig agrees to pay the f

ull contract price of $2,060 on July 15, 2020. The cost of the goods is $1,350. Marin delivers the product to Greig on June 15, 2020, and receives payment on July 15, 2020. Prepare the journal entries for Marin related to this contract. Either party may terminate the contract without compensation until one of the parties performs

1 answer:

12345 [234]3 years ago

6 0

Answer:

May 15, 2020

No Entry

June 15, 2020

Debit: A/R for 2,060

Credit: Revenue for 2,060

Debit: COGS for 1,350

Credit: Inventory for 1,350

July 15, 2020

Debit: Cash for 2,060

Credit: A/R for 2,060

Explanation:

Preparation of the journal entries for Cosmo related to this contract.

May 15, 2020

No Entry

June 15, 2020

Debit: A/R for 2,060

Credit: Revenue for 2,060

Debit: COGS for 1,350

Credit: Inventory for 1,350

July 15, 2020

Debit: Cash for 2,060

Credit: A/R for 2,060

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Q is quantity and P is price

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The demand is inelastic, that means that the porcentage in the increase in quantity is minor than the percentage in the reduction of the price. So total revenues decrease.

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This excess should be credited to Budgetary Fund Balance Unassigned.

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3 years ago

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Answer:

1. See the attached excel file for the journal entries.

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Explanation:

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Note: See the attached excel file for the journal entries.

The following are tge workings:

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Statement of Retained Earnings

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Loss on sale of treasury stock <u> (1,875) </u>

Ending balance <u> 346,125 </u>

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Stockholder Equity Section of Balance sheet

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<u>Particulars Amount ($)</u>

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Total contributed Capital 1,270,000

Retained Earnings <u> 346,125 </u>

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