Question

In: Accounting

Prepare the journal entries to record the following transactions on Kwang Company's books using a perpetual inventory system

Brief Exercise 5-04 a-c 

Prepare the journal entries to record the following transactions on Kwang Company's books using a perpetual inventory system. 


On March 2, Kwang Company sold $900,000 of merchandise on account to Sensat Company, terms 2/10, n/30. The cost of the merchandise sold was $620,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) 


On March 6, Sensat Company returned $90,000 of the merchandise purchased on March 2. The cost of the returned merchandise was $62,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Account Titles and Explanation Debit Credit (To record merchandise returned) (To record cost of merchandise returned)


On March 12, Kwang Company received the balance due from Sensat Company. (Credit account tities are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter o for the amounts.) 

Brief Exercise 5-04 a-c Prepare the journal entries to record the following transactions on Kwang Companys books using a per

On March 6, Sensat Company returned $90,000 of the merchandise purchased on March 2. The cost of the returned merchandise was

On March 12, Kwang Company received the balance due from Sensat Company. (Credit account tities are automatically indented wh


Solutions

Expert Solution

Journal

Date

Account title

Debit

Credit

March 2

Accounts Receivable - Sensat Company

900,000



Sales


900,000

March 2

Cost of goods sold

620,000



Inventory


620,000

March 6

Sales returns and allowance

90,000



Accounts receivable - Sensat Company


90,000

March 6

Inventory

62,000



Cost of goods sold


62,000

March 12

Cash

793,800



Sales discount

16,200



Accounts receivable - Sensat Company


810,000

Working note:

Final amount due = Sales - sales returns

= 900,000 - 90,000

= $810,000

Discount amount = Final amount due x Discount percentage

= 810,000 x 2/100

= $16,200

Cash to be received = Final amount due - Discount amount

= 810,000 - 16,200

= $793,800



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