Question

On March 2, Horst Company sold $891,800 of merchandise to Bernadina Company, terms 2/10, n/30. The cost of the merchandise sold was $501,700.

(b) On March 6, Bernadina Company returned $111,200 of the merchandise purchased on March 2. The cost of the merchandise returned was $67,630.
(c) On March 12, Horst Company received the balance due from Bernadina Company.
5-13

(a) On March 2, Kimbrel Company purchased $908,200 of merchandise from Pineda Company, terms 3/10, n/30.
(b) On March 6, Kimbrel Company returned $103,900 of the merchandise purchased on March 2.
(c) On March 12, Kimbrel Company paid the balance due to Pineda Company.

Answer 1

Account Receivables 891,800 debit

Sales Revenues 891,800 credit

COGS 501,700 debit

Merchandise Inventory 501,700 credit

Sales Returns 111,200 debit

Account Receivables 111,200 credit

Merchandise Inventory 67,630 debit

COGS 67,630 credit

Cash 764,388 debit

Sales discounts 15,612 debit

Accounts Receivables 780,600 credit

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Inventory 908,200 debit

Account payable 908,200 credit

Accounts Payable 103,900 debit

Inventory 103,900

Accounts Payable 804,300 debit

Inventory 24,129 credit

Cash 780,171 credit

Step-by-step explanation:

We have to record making debit = credit

when we sale the amount due form the customer is receivable

when we purchase the amount is payable.

1.- Balance of Bernandina:

891,800 - 111,200 = 780,600

discount of 2%:

780,600 x 0.02 = 15,612

proceeds from Bernandina:

780,600 - 15,612 = 764,388‬

2.- Purchase to Pineda's Balance:

908,200 - 103,900 = 804,300

we apply the discount

804,300 x 3% discount = 24,129

then, we calculate the amount due

804,300 - 24,129 = 780,171‬