Question

In: Accounting

Prepare the journal entries to record the following sales transactions in Pina Colada Corp.’s books. Pina...

Prepare the journal entries to record the following sales transactions in Pina Colada Corp.’s books. Pina Colada uses a perpetual inventory system. (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. Round answers to 0 decimal places, e.g. 125.)

Jan. 2 Pina Colada sold $45,900 of goods to Xtra Inc., terms 2/10, n/45, FOB destination. The cost of the goods sold was $25,704.
5 The appropriate company paid freight costs of $1,100.
6 Xtra returned $5,900 of the merchandise purchased from Pina Colada on January 2, because it was not needed. The cost of the merchandise returned was $3,304, and it was restored to inventory.
11 Pina Colada received the balance due from Xtra.

Solutions

Expert Solution

Journal entry

Date account and explanation Debit Credit
Jan 2 Account receivable 45900
Sales revenue 45900
(To record sales)
Cost of goods sold 25704
Merchandise inventory 25704
(To record cost of goods sold
Jan 5 Freight out 1100
Cash 1100
(To record freight paid)
Jan 6 Sales return and allowance 5800
Account receivable 5800
(To record sales return)
Merchandise inventory 3304
Cost of goods sold 3304
(To record cost of goods returned)
Jan 11 Cash (40000*98%) 39200
Sales discount 800
Account receivable (45900-5900) 40000
(To record amount received)

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