Question
In: Accounting
Dress for Success is an upscale dress shop. On 15 August, Sally, a regular customer, came in and put a deposit down on two items: $50 on a dress and $100 on a suit.
Dress for Success is an upscale dress shop. On 15 August, Sally, a regular customer, came in and put a deposit down on two items: $50 on a dress and $100 on a suit. The deposit was in the amount of $150, which represented 20% of the total retail value of the clothes. On 21 August, Sally came in again to the store and decided to take the dress. She paid the remaining amount of $200 and took the dress home. On 2 September, she came in and paid the full amount remaining for the suit.
Required:
Prepare the journal entries that Dress for Success would use to record these transactions.
Solutions
Expert Solution
The following are the journal entries which are required:
15 August:
Dr. Cash 150
Cr. Contract liability (Unearned revenue) 150
21 August
Dr. Contract liability (Unearned revenue) 50
Dr. Cash 200
Cr. Sales Revenue 250
2 September
Dr. Contract liability (Unearned revenue) 100
Dr. Cash 400
Cr. Sales Revenue 500
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