Question

Your company would like to buy a 3-D printer. Assume the company decides to purchase the Sindoh 3D Printer on Amazon. The selling price is $1,499. Amazon charges Sindoh a listing fee of 13% of the selling price payable to Amazon after an item sells. Your company orders the printer on May 26th. Sindoh ships your company the printer on June 18th. Your company’s credit card is charged on June 18th. This payment goes directly to Amazon who pays Sindoh on June 30th.

Using Journal Entries (see chapter 3), please show how Amazon would record these events (May 26th, June 18th and June 30th). If you believe that no entry is appropriate for any of these dates, please indicate the date and “No Entry”. For all of these dates, in addition to the journal entry, please explain in complete sentences why you decided to record the event as you did.

Answer 1

1. Journal Entry in Amazon -

Amazon -

Amazon company works as showcase for your product to get that display and grab attraction of the customer. When customer orders the product Amazon get that product deliver to their warehouse. Amazon charge listing fees from the seller who sells the product through Amazon.

Amazon is large online market to the seller to sell the product from anywhere to anyone. It helps businesses to reach to remote areas different places where seller can not reach.

In the given case

Amazon is not a seller or buyer who buys it from the seller and sell through his own name. Amazon only delivers the product from the seller to the buyer.

Hence when buyer places the order it does not generate revenue to the Amazon as they charged only if that product gets sold to the selller.

Hence 1. There will not be any Journal Entry.

On 18th june when amazon receives payment from the buyer the will book it as Cash receipt ro be paid to the creditors.

In 3rd Case when Amazon pay to creditors they will deduct listing fees and pay balance amount to the seller. That point of time they will book the revenue.