Question

Prepare the journal entries to record the following transactions on Markowitz Company's books using a perpetual inventory system.

On February 6, Wildhorse Company sold $102,000 of merchandise to the Lyman Company, terms 2/10, net /30. The cost of the merchandise sold was $71,000.
On February 8, the Lyman Company returned $13,000 of the merchandise purchased on February 6. The cost of the merchandise returned was $9,400. On February 16 Wildhorse Company received the balance due from the Lyman Company.

Answer 1

Date Account titles and explanation Debit Credit

Feb 6 Accounts Receivable $102,000

Sales Revenue $102,000

Cost of Goods Sold $71,000

Inventory $71,000

Feb 8 Sales Returns and Allowances $13,000

Accounts Receivable $13,000

Inventory $9,400

Cost of Goods Sold $9,400

Feb 16 Cash ($89,000*0.98) $87,220

Sales Discounts $1,780

Accounts Receivable ($102,000-$13,000) $89,000