Question

Purchase-Related Transactions

Showcase Co., a furniture wholesaler, sells merchandise to Balboa Co. on account, $30,500, terms n/30. The cost of the merchandise sold is $18,300. Showcase Co. issues a credit memo for $5,500 as a price adjustment prior to Balboa Co. paying the original invoice.

a. Journalize Balboa Co.’s entry for the purchase. If an amount box does not require an entry, leave it blank.

		fill in the blank ebb97b053ffc05f_2	fill in the blank ebb97b053ffc05f_3
		fill in the blank ebb97b053ffc05f_5	fill in the blank ebb97b053ffc05f_6

b. Journalize Balboa Co.’s entry for the credit memo. If an amount box does not require an entry, leave it blank.

		fill in the blank 56f16d02c05000d_2	fill in the blank 56f16d02c05000d_3
		fill in the blank 56f16d02c05000d_5	fill in the blank 56f16d02c05000d_6

c. Journalize Balboa Co.’s entry for the payment of the invoice. If an amount box does not require an entry, leave it blank.

		fill in the blank 57807d04cfc4028_2	fill in the blank 57807d04cfc4028_3
		fill in the blank 57807d04cfc4028_5	fill in the blank 57807d04cfc4028_6

Answer 1

	a-1)	Accounts receivable -Balboa Co				30,500
		Sales					30,500
		Cost of Merchandise sold				18,300
		Merchandise inventory					18,300
	b-1)	Customer refunds payable				5,500
		Accounts receivable -Balboa Co					5,500
		Merchandise inventory				3,300
		Estimated returns inventory					3,300
		(18300*5500/30500)
	c)	Cash				25,000
		Accounts receivable -Balboa Co					25,000
	for entry 3,300 if any amount is given in your question then enter that
	amount .And if the entry is not required then u can ignore it