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Journalizing sold merchandise on account

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2. What are some common types of receivables other than accounts receivable and notes receivable?

10. An article recently appeared in the Wall Street Journal indicating that companies are selling their receivables at a record rate. Why are companies selling their receivables?

29. How is a gain or loss on the sale of a plant asset computed?

34. What are natural resources, and what are their distinguishing characteristics?

35. Explain what depletion is and how it is computed.

BE1-2 Record the following transactions on the books of Essex Co.
(a) On July 1, Essex Co. sold merchandise on account to Harrard Inc. for $16,000, terms 2/10, n/30.
(b) On July 8, Harrard Inc. returned merchandise worth $3,800 to Essex Co.
(c) On July 11, Harrard Inc. paid for the merchandise.

BE1-15 Graig Mabasa Company acquires a delivery truck at a cost of $30,000. The truck is expected to have a salvage value of $2,000 at the end of its 4-year useful life. Compute annual depreciation for the first and second years using the straight-line method.

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2. What are some common types of receivables other than accounts receivable and notes receivable?

10. An article recently appeared in the Wall Street Journal indicating that companies are selling their receivables at a record rate. Why are companies selling their ...

Solution Summary

This provides help regarding journalizing entries such as sold merchandise on account and also discusses related accounting concepts

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Journalizing Accounting Transactions/Trial Balance for Springfield Company

1. Journalize and post the following transactions
2. Prepare a trial balance sheet.

The following were selected from among the transactions completed by Springfield Company during January of the current year.

Jan. 3. Purchased merchandise on account from Pynn Co., list price $16,000, trade

discount 35%, terms FOB shipping point, 2/10, n/30, with prepaid transportation costs of $320 added to the invoice.

Jan. 5. Purchased merchandise on account from Wilhelm Co., $8,000, terms FOB destination, 1/10, n/30.

Jan. 6. Sold merchandise on account to Sievert Co., list price $12,500, trade discount 40%, terms 2/10, n/30. The cost of the merchandise sold was $4,500.

Jan. 7. Returned $1,800 of merchandise purchased on January 5 from Wilhelm Co.

Jan. 13. Paid Pynn Co. on account for purchase of January 3, less discount.

Jan. 15. Paid Wihelm Co. on account for purchase of January 5, less return of January 7 and discount.

Jan. 16. Received cash on account from sale of January 6 to Sievert Co., less discount.

Jan. 19. Sold merchandise on nonbank credit cards and reported accounts to the card company, American Express, $6,450. The cost of the merchandise sold was $3,950.

Jan. 22. Sold merchandise on account to Elk River Co., $3, 480, terms 2/10, n/30. The cost of the merchandise sold was $1,400.

Jan. 23. Sold merchandise for cash, $9,350. The cost of the merchandise sold was $5,750.

Jan. 25. Received merchandise returned by Elk River Co. from sale on January 22, $1,480. The cost of the returned merchandise was $600.

Jan. 31. Received cash from American Express for nonbank credit card sales of January 19, less $225 service fee.

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