Question

The following transactions are for Sandhill Company.

1.		On December 3, Sandhill Company sold $491,200 of merchandise to Wildhorse Co., terms 3/10, n/30. The cost of the merchandise sold was $322,800.
2.		On December 8, Wildhorse Co. was granted an allowance of $24,400 for merchandise purchased on December 3.
3.		On December 13, Sandhill Company received the balance due from Wildhorse Co.

(a)

Prepare the journal entries to record these transactions on the books of Sandhill Company. Sandhill Company uses a perpetual inventory system. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.	Date	Account Titles and Explanation	Debit	Credit
1.	Choose a transaction date for number 1                                                          Dec. 3Dec. 8Dec. 13Jan .2	Enter an account title for journal entry 1 to record credit sale	enter a debit amount	enter a credit amount
		Enter an account title for journal entry 1 to record credit sale	enter a debit amount	enter a credit amount
		(To record credit sale)
		Enter an account title for journal entry 2 to record cost of merchandise sold	enter a debit amount	enter a credit amount
		Enter an account title for journal entry 2 to record cost of merchandise sold	enter a debit amount	enter a credit amount
		(To record cost of merchandise sold)
2.	Choose a transaction date for number 2                                                          Dec. 3Dec. 8Dec. 13Jan .2	Enter an account title for the third journal entry	enter a debit amount	enter a credit amount
		Enter an account title for the third journal entry	enter a debit amount	enter a credit amount
3.	Dec. 13	Enter an account title for the journal entry on December 13	enter a debit amount	enter a credit amount
		Enter an account title for the journal entry on December 13	enter a debit amount	enter a credit amount
		Enter an account title for the journal entry on December 13	enter a debit amount	enter a credit amount

(b)

Assume that Sandhill Company received the balance due from Wildhorse Co. on January 2 of the following year instead of December 13. Prepare the journal entry to record the receipt of payment on January 2. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
choose a transaction date                                                          Dec. 3Dec. 8Dec. 13Jan .2	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

Answer 1

Requirement a:

Date	Account title and explanation	Debit	Credit
Dec 3	Accounts receivable	$491,200
	Sales revenue		$491,200
	[To record credit sales]
	Cost of goods sold	$322,800
	Inventory		$322,800
	[To record cost of goods sold]
Dec 8	Sales returns and allowance	$24,400
	Accounts receivable		$24,400
	[To record purchase allowance]
Dec 13	Cash	$452,796
	Sales discount [$466,800 x 3%]	$14,004
	Accounts receivable [$491,200-$24,400]		$466,800
	[To record collections from customers]

Requirement b:

Date	Account title and explanation	Debit	Credit
Dec 31	Inventory	$491,200
	Accounts payable		$491,200
	[To record credit purchases]
Dec 8	Accounts payable	$24,400
	Inventory		$24,400
	[To record purchase allowance]
Dec 31	Accounts payable [$491,200 - $24,400]	$466,800
	Inventory [$466,800 x 3%]		$14,004
	Cash		$452,796
	[To record cash paid for accounts payable]