Question

5-5 Presented below are transactions related to Crane Company.

1.		On December 3, Crane Company sold $572,300 of merchandise on account to Swifty Co., terms 3/10, n/30, FOB shipping point. The cost of the merchandise sold was $371,400.
2.		On December 8, Swifty Co. was granted an allowance of $25,200 for merchandise purchased on December 3.
3.		On December 13, Crane Company received the balance due from Swifty Co.

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

b. Assume that Crane Company received the balance due from Swifty Co., on January 2 of the following year instead of December 13. Prepare the journal entry to record the receipt of payment on January 2. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Answer 1

Part-a : Journal Entry
Date	Account Tittle	Debit	Credit
3-Dec	Account Receivable- Crane Company	$572,300.00
	Sales		$572,300.00
	To Record Sales Made to Crane Company
3-Dec	Cost of Goods Sold	$371,400.00
	Merchandised Inventory		$371,400.00
	To Record COGS
8-Dec	Sales Allowance	$25,200.00
	Account Receivable- Crane Company		$25,200.00
	TO Record Sales Allowance
13-Dec	Cash	$530,687.00
	Sales Discount (547100*3%)	$16,413.00
	Account Receivable- Crane Company (572300-25200)		$547,100.00
	To Record Payment received

Part-b : Journal Entry
Date	Account Tittle	Debit	Credit
2-Jan	Cash	$547,100.00
	Account Receivable- Crane Company (572300-25200)		$547,100.00
	To Record Payment received