Question

In: Accounting

On December 28, 20Y3, Silverman Enterprises sold $19,500 of merchandise to Beasley Co. with terms 2/10, n/30.

Customer return and refund 


On December 28, 20Y3, Silverman Enterprises sold $19,500 of merchandise to Beasley Co. with terms 2/10, n/30. The cost of the goods sold was $11,600. On December 31, 20Y3, Silverman prepared its adjusting entries, yearly financial statements, and closing entries. On January 3, 2014, Silverman Enterprises issued Beasley Co. a credit memo for returned merchandise. The invoice amount of the returned merchandise was $4,500 and the merchandise originally cost Silverman Enterprises $2,200. 


a. Journalize the entries by Silverman Enterprises to record the December 28, 20Y3 sale, using the net method under a perpetual inventory system. If an amount box does not require an entry, leave it blank. 

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b. Journalize the entries by Silverman Enterprises to record the merchandise returned by Beasley Co. on January 3, 20Y4. If an amount box does not require an entry, leave it blank. 

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c. Journalize the entry to record the receipt of the amount due by Beasley Co. on January 7, 20Y4. If an amount box does not require an entry, leave it blank. 

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Solutions

Expert Solution

a.

Journal

Date

Account Title and Explanation

Debit

Credit

Dec. 28, 20Y3 Account receivable - Beasley co. 19,500
Sales 19,500
Dec. 28, 20Y3 Cost of goods sold 11,600
Inventory 11,600

b.

Journal

Date

Account Title and Explanation

Debit

Credit

Jan. 3, 20Y4 Sales return and allowance 4,500
Account receivable - Beasley co. 4,500
Jan. 3, 20Y4 Inventory 2,200
Cost of goods sold 2,200

c.

Journal

Date

Account Title and Explanation

Debit

Credit

Jan. 7, 20Y4 Cash 14,700
Sales discount 300
Account receivable - Beasley co. 15,000

Final amount due = Sales - sales return

= 19,500 - 4,500

= $15,000

Discount amount = Final amount due x Discount percentage

= 15,000 x 2/100

= $300

Cash received = Final amount due - Discount amount

= 15,000 - 300

= $14,700

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