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Sales-Related Transactions The debits and credits for four related entries for a sale of $15,000, terms...

Sales-Related Transactions

The debits and credits for four related entries for a sale of $15,000, terms 1/10, n/30, are presented in the following T accounts.

Cash
(5) 13,860
Accounts Receivable
(1) 14,850 (3) 990
(5) 13,860
Merchandise Inventory
(4) 575 (2) 8,800
Estimated Returns Inventory
(4) 575
Customer Refunds Payable
(3) 990
Sales
(1) 14,850
Cost of Merchandise Sold
(2) 8,800

Describe each transaction.

1.
2.
3.
4.
5.
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Answer #1

1:- Sold merchandise on account of gross sale of $15,000 and company using net method to record sale therefore net sales is $14850 ($15000 X 99℅ )

2. Recorded the cost of the merchandise sold of $8,800 and reduced the merchandise inventory account because company using prepetual method .

3. Accepted a return of merchandise and issued a credit memo of $990 which is less discount.

4. Recorded the merchandise returned cost of $575 for merchandise account

5. Received the due amount of Receivables of $13860 from customers .

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