FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
The debits and credits for five related transactions, (1) through (5), are presented in the following T accounts. Assume the credit terms were 2/10, n/30, using the net method under a perpetual inventory system. Cash Sales (5) 10,290 (1) 11,760 Accounts Receivable Cost of Goods Sold (1) 11,760 (3) 1,470 (2) 7,000 (5) 10,290 Inventory (4) 900 (2) 7,000 Estimated Returns Inventory (4) 900 Customer Refunds Payable (3) 1,470 a. Describe each transaction. 1. Sold merchandise on account, net of discount. V 2. Recorded the cost of the goods sold and reduced the inventory account. V 3. Granted a credit against a customer's accounts receivable for returned merchandise. V 4. Updated the inventory account for the cost of the merchandise returned. V 5. Received the balance due. V b. What was the invoice amount of the merchandise that was returned?
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Transcribed Image Text:The debits and credits for five related transactions, (1) through (5), are presented in the following T accounts. Assume the credit terms were 2/10, n/30, using the net method under a perpetual inventory system. Cash Sales (5) 10,290 (1) 11,760 Accounts Receivable Cost of Goods Sold (1) 11,760 (3) 1,470 (2) 7,000 (5) 10,290 Inventory (4) 900 (2) 7,000 Estimated Returns Inventory (4) 900 Customer Refunds Payable (3) 1,470 a. Describe each transaction. 1. Sold merchandise on account, net of discount. V 2. Recorded the cost of the goods sold and reduced the inventory account. V 3. Granted a credit against a customer's accounts receivable for returned merchandise. V 4. Updated the inventory account for the cost of the merchandise returned. V 5. Received the balance due. V b. What was the invoice amount of the merchandise that was returned?
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