Question

Presented below are transactions related to Bogner Company.

1. On December 3, Bogner Company sold $570,000 of merchandise on account to Maris Co., terms 2/10, n/30, FOB shipping point. The cost of the merchandise sold was $350,000.
2. On December 8, Maris Co. was granted an allowance of $20,000 for merchandise purchased on December 3.
3. On December 13, Bogner Company received the balance due from Maris Co.
Prepare the journal entries to record these transactions on the books of Bogner Company using a perpetual inventory system.

Answer 1

Step-by-step explanation:

The journal entries are shown below:

On December 3

Accounts receivable A/c Dr $$570,000

To sales A/c $570,000

(Being goods are sold on credit)

On December 3

Cost of goods sold A/c Dr $350,000

To Merchandise inventory A/c $350,000

(Being goods sold at cost )

On December 8

Sales return and allowance A/c Dr $20,000

To Accounts receivable $20,000

(Being sales return is recorded)

On December 13

Cash A/c Dr $539,000

Sales Discount A/c Dr $11,000

To Accounts receivable $550,000

(Being cash received recorded)

The computation of the account receivable

= Credit sales - returned goods

= $570,000 - $20,000

= $550,000

And, the discount would be

= Accounts receivable × percentage given

= $550,000 × 2%

= $11,000

The remaining amount would be credited to the cash account.