Question

Prepare journal entries to record the following transactions for Chief Ugundi’s sales to Gilligan (A-E), Ginger and Mary Ann (G-K), and the Professor (M-Q). Show work on calculations supporting your amounts.

Pay attention to whether the buyer or supplier pays the freight cost to have them delivered. You should record an entry ONLY when the seller pays for the products to be delivered. If the buyer pays for the products to be delivered just record “No entry” in the space under the transaction. This is the opposite of what you did before.

Pay attention to the last entry for each regarding whether or not a cash discount is allowed. Not everyone paid on time. Record a cash discount ONLY if paid within the discount period.

Round the Gross margin % to the nearest percentage without any decimals (record 5.25% as 5%)

Chief Ugundi, leader of the Matoba tribe, sold Gilligan 1,200 coconuts on account at a price of $3 each. The coconuts had a unit cost of $1.80.

Account	Debit	Credit

What was the gross margin on the above sale?

Gross margin $$ =
Gross margin % =

Gilligan paid $150 to have the coconuts delivered his retail store.

Account	Debit	Credit

After inspecting the coconuts purchased earlier, Gilligan noticed that 100 of them were rotten. So, he shipped them back to Chief Ugundi for a full refund.

Account	Debit	Credit

After inspecting the coconuts purchased earlier, Gilligan noticed that 100 of them were not quite ripe as promised by Chief Ugundi. Instead of sending these back, the Chief Ugundi offered Gilligan $200 if he would keep those coconuts as they are. Gilligan accepted.

Account	Debit	Credit

Chief Ugundi offered Gilligan a discount of 1% if he makes a full payment in 10 days after receipt of the coconuts. Otherwise, the full amount is due in 30 days after receipt. Gilligan paid off the remainder of the balance owed to Chief Ugundi within the cash discount period. Prepare the entry to record the receipt by Chief Ugundi.

Account	Debit	Credit

Chief Ugundi sold Ginger and Mary Ann 100 beads on account at a price of $10 each. The beads had a unit cost of $6.

Account	Debit	Credit

Answer 1

Date	Account title	Debit	credit
a-1	Accounts receivable	3600
	sales revenue (1200*3)		3600
	[sales made on account]
	cost of goods sold	2160
	merchandise inventory (1200*1.8)		2160
b	No entry in books of Chief Ugundi since Gilligan paid the freight
c	sales return and allowance	300
	Accounts receivable (100*3)		300
	merchandise inventory	180
	cost of goods sold (100*1.8)		180
d	sales return and allowance	200
	Accounts receivable		200
e	cash	3069
	sales discount   [3100*.01]	31
	Accounts receivable [3600-300-200]		3100
f	Accounts receivable	1000
	sales revenue (100*10)		1000
	cost of goods sold	600
	merchandise inventory (100*6)		600