Question

The following merchandise transactions occurred in December. Both companies use a perpetual inventory system.

Dec.	3		Monty Ltd. sold goods to Grouper Corp. for $64,800, terms n/15, FOB shipping point. The inventory had cost Monty $34,400. Monty’s management expected a return rate of 3% based on prior experience.
	7		Shipping costs of $880 were paid by the appropriate company.
	8		Grouper returned unwanted merchandise to Monty. The returned merchandise has a sales price of $2,000, and a cost of $1,080. It was restored to inventory.
	11		Monty received the balance due from Grouper.

(a)

Record the above transactions in the books of Monty. (List all debit entries before credit entries. Credit account titles are automatically indented when the 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. Round answers to the nearest whole dollar, e.g. 5,275.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 8Dec. 11Dec. 3Dec. 7	enter an account title to record credit sale on December 3	enter a debit amount	enter a credit amount
	enter an account title to record credit sale on December 3	enter a debit amount	enter a credit amount
	enter an account title to record credit sale on December 3	enter a debit amount	enter a credit amount
	(To record credit sale)
Dec. 7Dec. 11Dec. 8Dec. 3	enter an account title to record cost of merchandise sold on December 3	enter a debit amount	enter a credit amount
	enter an account title to record cost of merchandise sold on December 3	enter a debit amount	enter a credit amount
	enter an account title to record cost of merchandise sold on December 3	enter a debit amount	enter a credit amount
	(To record cost of merchandise sold)
Dec. 8Dec. 3Dec. 7Dec. 11	enter an account title for the journal entry on December 7	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on December 7	enter a debit amount	enter a credit amount
Dec. 7Dec. 11Dec. 3Dec. 8	enter an account title to record return of goods on December 8	enter a debit amount	enter a credit amount
	enter an account title to record return of goods on December 8	enter a debit amount	enter a credit amount
	(To record return of goods)
Dec. 7Dec. 3Dec. 8Dec. 11	enter an account title to record cost of merchandise returned on December 8	enter a debit amount	enter a credit amount
	enter an account title to record cost of merchandise returned on December 8	enter a debit amount	enter a credit amount
	(To record cost of merchandise returned)
Dec. 11Dec. 3Dec. 8Dec. 7	enter an account title for the journal entry on December 11	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on December 11	enter a debit amount	enter a credit amount

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(b)

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(c)

The parts of this question must be completed in order. This part will be available when you complete the part above.

Answer 1

Date	accounts	debit	credit
Dec 3	accounts receivable	64800
	Sales		64800
	Cost of goods sold	34400
	Inventory		34400
	Sales return and allowance (64800*3%)	1944
	Allowance for sales return and allowance		1944
Dec. 7	no entry required
Dec 8	sales return and allowance	2000
	Accounts receivable		2000
	Inventory	1080
	Cost of goods sold		1080
Dec 11	cash (64800-2000)	62800
	Accounts receivable		62800