Question

In: Accounting

Prepare journal entries for the transactions

Presented below are selected transactions of Molina Company. Molina sells in large quantities to other companies and also sells its product in a small retail outlet.

 

March 1 Sold merchandise on account to Dodson Company for $10,400, terms 3/10, n/30.

March 3  Dodson Company returned merchandise worth $200 to Molina.

March 9 Molina collected the amount due from Dodson Company from the March 1 sale.

March 15 Molina sold merchandise for $1,000 in its retail outlet. The customer used his Molina credit card.

March 31  

Molina added 1.8% monthly interest to the customer’s credit card balance.

Prepare journal entries for the transactions above. (Credit account titles are automatically indented when amount is entered. Do not indent manually

Solutions

Expert Solution

Explanation: 

  Mar-01 Accounts Receivable 10400   

Sales revenue 10400  

Mar-03 Sales Return Allowance 200   

Accounts Receivable 200  

 

Mar-09 : Cash = 9894 (10200*97%)

Sales Discounts=  306 (  10200*3%)

Accounts receivable = ( 9894 + 306 )  10200

Mar-15 Accounts receivable 1000   

Sales revenue 1000

Mar-31: Interest Revenue   

           = (1000*1.8%*0.5) 

O.5 = 1/2 i.e. half of the month ( Mar 15 to Mar 31 ) 

 


Date Account Title & Explanation Debit ($) Credit ($) calculation

Mar-01 Accounts Receivable 10400   

Sales revenue 10400  

Mar-03 Sales Return Allowance 200   

Accounts Receivable 200  

Mar-09 Cash 9894 10200*97%

Sales Discounts 306 10200*3%

Accounts receivable 10200  

Mar-15 Accounts receivable 1000   

Sales revenue 1000  

Mar-31 Accounts receivable 9 [1000*1.8%*0.5]

Interest Revenue 9  

(interest for 15 days recorded)    

 

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