FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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On July 10, 2020, Flounder Music sold CDs to retailers on account and recorded sales revenue of $656,000 (cost $485,440). Flounder grants the right to return CDs that do not sell in 3 months following delivery. Past experience indicates that the normal return rate is 15%. By October 11, 2020, retailers returned CDs to Flounder and were granted credit of $70,700.

Prepare Flounder’s journal entries to record (a) the sale on July 10, 2020, and (b) $70,700 of returns on October 11, 2020, and on October 31, 2020. Assume that Flounder prepares financial statement on October 31, 2020. (Credit account titles are automatically indented when 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.)

No.
Date
Account Titles and Explanation
Debit
Credit
(a)
                                                           Jul. 10, 2020Oct. 11, 2020Oct. 31, 2020
enter an account title to record sales on July 10, 2017
enter a debit amount
enter a credit amount
   
enter an account title to record sales on July 10, 2017
enter a debit amount
enter a credit amount
   
(To record sales)
   
   
enter an account title to record cost of goods sold on July 10, 2017
enter a debit amount
enter a credit amount
   
enter an account title to record cost of goods sold on July 10, 2017
enter a debit amount
enter a credit amount
   
(To record cost of goods sold)
   
(b)
                                                           Jul. 10, 2020Oct. 11, 2020Oct. 31, 2020
enter an account title to record sales returns on October 11, 2017
enter a debit amount
enter a credit amount
   
enter an account title to record sales returns on October 11, 2017
enter a debit amount
enter a credit amount
   
(To record sales returns)
   
   
enter an account title to record cost of goods returned on October 11, 2017
enter a debit amount
enter a credit amount
   
enter an account title to record cost of goods returned on October 11, 2017
enter a debit amount
enter a credit amount
   
(To record cost of goods returned)
   
 
                                                           Jul. 10, 2020Oct. 11, 2020Oct. 31, 2020
enter an account title to record the transaction on October 31, 2017
enter a debit amount
enter a credit amount
   
enter an account title to record the transaction on October 31, 2017
enter a debit amount
enter a credit amount
 
 
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