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Information about "Journal Entries"

Boggs Company sold merchandise to Wilsey Company on account for $73,000 with credit terms of ?/10, n/30. The cost of the merchandise sold was $43,800. During the discount period, Wilsey Company returned $3,000 of merchandise and paid its account in full (minus the discount) by remitting $69,300 in cash. Both companies use a perpetual inventory system. Prepare the journal entries that Boggs Company made to record:
(1) the sale of merchandise.
(2) the return of merchandise.
(3) the collection on account.

Solution Preview

(1) the sale of merchandise.

The entry for sale of merchandise is ( under perpertual method the cost of goods sold is recorded for each sale)

Accounts Receivable Dr 73,000
Sales Cr 73,000
(To record the sales)
Cost of goods ...

Solution Summary

The solution explains how the prepare journal entries relating to (1) the sale of merchandise, (2) the return of merchandise and (3) the collection on account.