Company X orders raw materials for EUR 1,000 and manages to obtain a discount of 15% from one of its suppliers. Once raw materials are received, defaults are noted by the warehouse manager. Company X intends a lawsuit against its supplier. Company C's lawyer estimates that Company C might be entitled to receive EUR 200. Decision from the court: the supplier needs to grant a rebate of EUR 150. Prepare the accounting journal entries for the purchase, for the suit and the rebate at the level of Company C.

Company X orders raw materials for EUR 1,000 and manages to obtain a discount of 15% from one of its suppliers. Once raw materials are received, defaults are noted by the warehouse manager. Company X intends a lawsuit against its supplier. Company C's lawyer estimates that Company C might be entitled to receive EUR 200. Decision from the court: the supplier needs to grant a rebate of EUR 150. Prepare the accounting journal entries for the purchase, for the suit and the rebate at the level of Company C.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 2E: Consider each of the following scenarios: a. A seller orally agrees with one of its best customers...

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Clivia Traders, a stationery shop, situated in Sea Point is owned by Daisy Garden. The business is a registered VAT vendor and trades only with other registered vendors. All amounts include 15% VAT where applicable, except if otherwise indicated. They use a perpetual inventory system and all goods are marked up at 20% above cost, before taking into account any trade discounts. The business does not expect to award any settlementdiscounts nor to qualify for any settlement discounts. All occurrences of settlement discounts are therefore incidental in nature.All money received is banked daily.The following transactions took place in the month of February 2020 DATE TRANSACTION1 Owner contributed R5 000 cash4 Cash sales R13 800 including VAT6 Cash purchases R8 000 excluding VAT10 Paid Telkom for telephone account R34515 Paid R2 000 towards a loan settlement with Mzanzi Bank20 Cash sales R5 750 including VAT23 Cash purchases R4 600 including VAT25 Paid wages R800 Prepare the following…