Question

Prepare separate entries for each transaction for Ivanhoe Company. The merchandise purchased by Oriole Company on June 10 cost Ivanhoe Company 3,560, and the goods returned cost Ivanhoe Company200?

Answer 1

To prepare separate entries for each transaction for Ivanhoe Company, determine the accounts to be debited and credited for each transaction. For the merchandise purchased by Oriole Company, debit Accounts Receivable and credit Sales. For the goods returned, debit Sales Returns and Allowances and credit Accounts Receivable.

Step-by-step explanation:

To prepare separate entries for each transaction for Ivanhoe Company, you will need to use the double-entry accounting system. For the merchandise purchased by Oriole Company, you would debit the Accounts Receivable account (since the purchase was made on credit) and credit the Sales account for the cost of $3,560. Then, for the goods returned, you would debit the Sales Returns and Allowances account and credit the Accounts Receivable account for the cost of $200.