Question

JKL Company uses the perpetual inventory method and sells to its customers under 2/10/ net 30 terms.

What entry would JKL Company make if it sold 100 widgets to Customer Company for $10,000 that it had in inventory at a cost of $6,000 on October 1.

What entry would JKL make on October 4 if Customer Company returned 10 widgets for credit because they were damaged in shipment?

What entry would JKL make if Customer Company paid for the remaining 90 widgets on October 9?

What is the net sales amount on this transaction?

What entry would JKL make if it discovered after the performance of a physical inventory on October 31 that the count sheets indicated that the perpetual record was overstated by $200?

Answer 1

Req 1:
Journal entry:
1-Oct	Accounts receivable Dr.				10000
	Sales revenue account					10000
	Cost of goods sold Account Dr.				6000
	Merchandise inventory account					6000
Req 2:
4-Oct	Sales retrurn and allowance Dr.				1000
	Accounts receivable (10000/100*10)					1000
	Merchandise inventory Dr.				600
	Cost of goods sold account					600
Req 3:
9-Oct	Cash account Dr.(9000*98%)				8820
	Sales discount account Dr. (9000*2%)				180
	Accounts receivable					9000
Req 4:
Net sales:
Gross sales revenue			10000
Less: Sales return and allowance			1000
Less: Sales discount			180
Net sales:			8820
Req 5:
Journal entry for inventory shrinkage:
Cost of good sold Account Dr.			200
Merchandise inventory account				200