Question

Kingbird Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2020. The goods have a sales price of $599,300 (cost of $490,000). The terms are net 30. If Danone pays within 5 days, however, it receives a cash discount of $9,300. Past history indicates that the cash discount will be taken. On January 28, 2020, Danone makes payment to Kingbird for the full sales price.

(a) Your answer is correct. Prepare the journal entry(ies) to record the sale and related cost of goods sold for Kingbird Company on January 2, 2020, and the payment on January 28, 2020. Assume that Kingbird Company records the January 2, 2020, transaction using the net method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit choose a transaction date Jan. 2, 2020Jan. 28, 2020 enter an account title to record sales enter a debit amount enter a credit amount enter an account title to record sales enter a debit amount enter a credit amount (To record sales) enter an account title to record cost of goods sold enter a debit amount enter a credit amount enter an account title to record cost of goods sold enter a debit amount enter a credit amount (To record cost of goods sold) choose a transaction date Jan. 2, 2020Jan. 28, 2020 enter an account title to record payment received enter a debit amount enter a credit amount enter an account title to record payment received enter a debit amount enter a credit amount enter an account title to record payment received enter a debit amount enter a credit amount (To record payment received) SHOW LIST OF ACCOUNTS SHOW SOLUTION LINK TO TEXT Attempts: 2 of 3 used

(b) Prepare the journal entry(ies) to record the sale and related cost of goods sold for Kingbird Company on January 2, 2020, and the payment on January 28, 2020. Assume that Kingbird Company records the January 2, 2020, transaction using the gross method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit choose a transaction date Jan. 2, 2020Jan. 28, 2020 enter an account title to record sales enter a debit amount enter a credit amount enter an account title to record sales enter a debit amount enter a credit amount (To record sales) enter an account title to record cost of goods sold enter a debit amount enter a credit amount enter an account title to record cost of goods sold enter a debit amount enter a credit amount (To record cost of goods sold) choose a transaction date Jan. 2, 2020Jan. 28, 2020 enter an account title to record payment received enter a debit amount enter a credit amount enter an account title to record payment received enter a debit amount enter a credit amount (To record payment received)

Answer 1

	Kingbird company
	Ans a)
	Net Method
Date	Account Title	Dr $	Cr $
Jan 2.2020.	Sales		590,000
	Note Receivable	590,000
	(recognizing sales by net method considering $9300 sales
	discount and Note receivable for the sales)
	Cost of Goods Sold	490,000
	Finished Goods Inventory		490,000
	(recording COGS and inventory amounts related to sale)
Jan 28.2020.	Note Receivable		590,000
	Sales discount forfeited		9,300
	Cash	599,300
	(To record full sales price received and Sales dicount forfeited
	recorded)
	Ans b)
	GrossMethod
Date	Account Title	Dr $	Cr $
Jan 2.2020.	Sales		599,300
	Note Receivable	599,300
	(recognizing sales by Gross method
	and Note receivable for the sales)
	Cost of Goods Sold	490,000
	Finished Goods Inventory		490,000
	(recording COGS and inventory amounts related to sale)
Jan 28.2020.	Note Receivable		599,300
	Cash	599,300
	(To record full sales price received )