Question

Two different companies, Ripper and Berners, entered into the following inventory transactions during December. Both companies use a perpetual inventory system.

•	December 3 – Ripper Corporation sold inventory on account to Berners Corp. for $496,000, terms 2/10, n/30. This inventory originally cost Ripper $314,000.
•	December 8 – Berners Corp. returned inventory to Ripper Corporation for a credit of $3,900. Ripper returned this inventory to inventory at its original cost of $2,469.
•	December 12 – Berners Corp. paid Ripper Corporation for the amount owed.

Required:

a.	Prepare the journal entries to record these transactions on the books of Ripper Corporation. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Journal entry :

Date	accounts & explanation	debit	credit
Dec 3	Account receivable	496000
	Sales revenue		496000
	(To record credit sales)
	Cost of goods sold	314000
	Merchandise inventory		314000
	(To record cost of goods sold)
Dec 8	Sales return and allowance	3900
	Account receivable		3900
	(TO record sales return)
	Merchandise inventory	2469
	Cost of goods sold		2469
	(To record cost of returned goods)
Dec 12	Cash (492100*98%)	482258
	Sales discount	9842
	Account receivable (496000-3900)		492100
	(To record amount received)