On December 1, Macy Company sold merchandise with a selling price of $9,000 on account to...

On December 1, Macy Company sold merchandise with a selling price of $9,000 on account to Mrs. Jorgensen, with terms 4/10, n/30. On December 3, Mrs. Jorgensen returned merchandise with a selling price of $700. Mrs. Jorgensen paid the amount due on December 9. What journal entry did Macy Company prepare on December 9 assuming the gross method is used?

A) Debit Cash for $7,968 and credit Accounts Receivable for $7,968.

B) Debit Sales Revenue for $7,968, debit Sales Discounts for $332, and credit Accounts Receivable for $8,300.

C) Debit Sales Revenue for $8,300, credit Sales Discount for $332 and credit Cash for $7,968.

D) Debit Cash for $7,968, debit Sales Discounts for $332, and credit Accounts Receivable for $8,300.

Solutions

Expert Solution

Solution:

Journal Entry
Date	Particulars	Debit	Credit
09-Dec	Cash Dr ($8300*96%)	$7,968
	Sales Discount Dr ($8300*4%)	$332
	To Accounts Receivable ($9000- $700)		$8,300

Hence option "D" is correct.

ekkarill92 answered 2 years ago

Next > < Previous

Related Solutions

The company sold merchandise to a customer on December 1, 2019, for $100,000. The customer paid...

The company sold merchandise to a customer on December 1, 2019, for $100,000. The customer paid with a promissory note that has a term of 6 months and an annual interest rate of 9%. The company’s accounting period ends on December 31. What amount should the company recognize as interest revenue on December 31, 2019?

Aug. 1 Purchased merchandise on account from Arotek Company for $7,500, FOB destination. 5 Sold merchandise...

Aug. 1 Purchased merchandise on account from Arotek Company for $7,500, FOB destination. 5 Sold merchandise on account to Laird Corp. for $5,200. The merchandise had cost $4,000. 8 Purchased merchandise on account from Waters Corporation for $5,400, FOB shipping point. The invoice showed that at Sheng’s request, Waters paid the $140 shipping charges and added that amount to the bill. 10 Laird returned merchandise from the August 5 sale that had cost Sheng $400 and been sold for $600....

c. February 7-sold merchandise on account for $800, and the cost of this merchandise sold was...

c. February 7-sold merchandise on account for $800, and the cost of this merchandise sold was $560. Account Name Increase or Decrease Amount Explanation: d. February 10-returned $500 on defective merchandise (list price) of the purchases dated February 3. Account Name Increase or Decrease Amount Explanation: e. February 11-paid the amount due of the purchased realized. Account Name Increase or Decrease Amount Explanation: f. February 12-accepted defective products returned that were sold by $150 on February 7, and the cost...

question 13 Merchandise with a list price of $4,200 and costing $2,300 is sold on account,...

question 13 Merchandise with a list price of $4,200 and costing $2,300 is sold on account, subject to the following terms: FOB destination, 2/10, n/30. The seller prepays the freight costs of $85 (debit Delivery Expense for the freight costs). Prior to payment for the goods, the seller issues a credit memo for $750 to the customer for merchandise costing $425 that is returned. Payment is received within the discount period. The company uses a perpetual inventory system. Record the...

0.... The account in which returns of merchandise sold are recorded ........... 1.... The...

0.... The account in which returns of merchandise sold are recorded ........... 1.... The principal ledger that contains all of the balance sheet and income statement accounts is called the ............................................................ 2.... Each subsidiary ledger is represented by a summarizing account in the general ledger called a(n) ................................................................. 3.... The accounts in the accounts payable ledger have a normal balance of (debit or credit) ....................................................................................... 4.... The bill that the seller sends to the buyer...

Bascomb Company purchased $420,000 in merchandise on account during the month of April, and merchandise costing $350,000 was sold on account for $425,000

Provide the solution that is required, making sure to demonstrate how you obtained the answer. 4) Bascomb Company purchased $420,000 in merchandise on account during the month of April, and merchandise costing $350,000 was sold on account for $425,000. Required: 1. Prepare journal entries to record the purchases and sales assuming Bascomb uses a perpetual inventory system. 2. Prepare journal entries to record the purchases and sales assuming Bascomb uses a periodic inventory system. 5) Meteor Co. purchased merchandise on March 4, 2018, at a...

#1 On June 3, Bridgeport Company sold to Chester Company merchandise having a sale price of...

#1 On June 3, Bridgeport Company sold to Chester Company merchandise having a sale price of $5,600 with terms of 2/10, n/60, f.o.b. shipping point. An invoice totaling $92, terms n/30, was received by Chester on June 8 from John Booth Transport Service for the freight cost. On June 12, the company received a check for the balance due from Chester Company. Prepare journal entries on the Bridgeport Company books to record all the events noted above under each of...

Martin Co. sold merchandise to Fess Company on December 31, FOB shipping point. If the merchandise...

Martin Co. sold merchandise to Fess Company on December 31, FOB shipping point. If the merchandise is in transit on December 31, the end of the fiscal year, which company would report it in its financial statements? Explain. How is the method of determining the cost of the inventory and the method of valuing it disclosed in the financial statements? What uses can be made of the estimate of the cost of inventory determined by the gross profit method?

A. On June 10, Crane Company purchased $9,000 of merchandise on account from Pronghorn Company, FOB shipping point, term...

A. On June 10, Crane Company purchased $9,000 of merchandise on account from Pronghorn Company, FOB shipping point, terms 2/10, n/30. Crane pays the freight costs of $550 on June 11. Damaged goods totaling $350 are returned to Pronghorn for credit on June 12. The fair value of these goods is $80. On June 19, Crane pays Pronghorn Company in full, less the purchase discount. Both companies use a perpetual inventory system. Prepare separate entries for each transaction on the...

On March 2, Splish Brothers Company sold $885,600 of merchandise to Sunland Company on account

Current Attempt In Progress Prepare the journal entries to record the following transactions on Sunland Company's books using a perpetual inventory system. (if no entry is required, select "No Entry for the account titles and enter for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) (a) On March 2, Splish Brothers Company sold $885,600 of merchandise to Sunland Company on account, terms 2/10, 1/30....

Subjects