Question

Prepare the journal entries to record the following transactions on Crane Company’s books using a perpetual inventory system. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

(a)		On March 2, Larkspur Company sold $889,700 of merchandise to Crane Company on account, terms 3/10, n/30. The cost of the merchandise sold was $586,400.
(b)		On March 6, Crane Company returned $117,700 of the merchandise purchased on March 2. The cost of the merchandise returned was $63,800.
(c)		On March 12, Larkspur Company received the balance due from Crane Company.

No.	Date	Account Titles and Explanation	Debit	Credit
(a)	choose a transaction date	enter an account title	enter a debit amount	enter a credit amount
	choose a date	enter an account title	enter a debit amount	enter a credit amount
(b)	choose a date	enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount
(c)	choose a transaction date	enter an account title	enter a debit amount	enter a credit amount
	choose a date	enter an account title	enter a debit amount	enter a credit amount
	choose a date	enter an account title	enter a debit amount	enter a credit amount

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Answer 1

No.	Date	Account Titles and Explanation	Debit	Credit
(a)	March 2	Account receivable	889,700
		Sales revenue		889,700
		(To record sale of merchandise)
	March 2	Cost of goods sold	586,400
		Merchandise inventory		586,400
(b)	March 6	Sales return and allowance	117,700
		Account receivable		117,700
		(To record return of merchandise)
	March 6	Merchandise inventory	63,800
		Cost of goods sold		63,800
(c)	March 12	Cash (772,000*97%)	748,840
		Sales discount	23,160
		Account receivable (889,700-117,700)		772,000

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