Question

Journalize the following sales transactions for Salem Sportswear. Explanations are not required.

Aug. 1 Salem sold $69,000 of women's sportswear on account, credit terms of 3 / 10, n / 60. Cost of goods is $38,000.
5 Salem received a $3,500 sales return on damaged goods from the customer. Cost of goods damaged is $1 ,750.
10 Salem receives payment from the customer on the amount due, less the return and discount.

Journalize the sales transactions.

Aug 1 : Salem sold $69,000 of women's sportswear on account, credit terms of 3 / 10, n / 60. Cost of goods is S38,000.
Begin by preparing the entry to journalize the sale portion of the transaction.

Answer 1

Answer:

Aug. 1

Trade Receivable $69,000 (debit)

Cost of Sales  $38,000 (debit)

Sales Revenue $69,000 (credit)

Inventory  $38,000 (credit)

Aug 5

Sales Revenue  $3,500 (debit)

Inventory  $1 ,750 (debit)

Trade Receivable  $3,500 (credit)

Cost of Sales  $1 ,750 (credit)

Aug 10

Cash $63,535 (debit)

Discount allowed $1,965 (credit)

Trade receivable $65,500 (credit)

Explanation:

Aug 1

Recognize the Cost of Sale and the Assets of Trade Receivables.

Aug 5

De-recognize the Cost of Sales and Assets of Trade receivables to the extent of the goods that were returned.

Aug 10

Recognize the Cash Asset received less the cash discount of 3 % and also recognize the discount allowed expense to the amount of discount allowed.