On July 2, 2021, Metlock Company sold to Sue Black merchandise having a sales price of $12,000 (cost $7,200) with terms of 2/10. n/30. f.o.b. shipping point. Metlock estimates that merchandise with a sales value of $750 will be returned An invoice totaling $120, terms n/30, was received by Black on July 6 from Pacific Delivery Service for the freight cost. Upon receipt of the goods, on July 3, Black notified Metlock that $350 of merchandise contained flaws. The same day, Metlock issued a credit memo covering the defective merchandise and asked that it be returned at Metlock's expense. Metlock estimates the returned items to have a fair value of $140. The freight on the returned merchandise was $20 paid by Metlock on July 7. On July 12, the company received a check for the balance due from Black. Your answer is partially correct. Prepare journal entries for Metlock Company to record all the events noted above assuming sales and receivables are entered at gross selling price. (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 O for the amounts. Record journal entries in the order presented in the problem.)
On July 2, 2021, Metlock Company sold to Sue Black merchandise having a sales price of $12,000 (cost $7,200) with terms of 2/10. n/30. f.o.b. shipping point. Metlock estimates that merchandise with a sales value of $750 will be returned An invoice totaling $120, terms n/30, was received by Black on July 6 from Pacific Delivery Service for the freight cost. Upon receipt of the goods, on July 3, Black notified Metlock that $350 of merchandise contained flaws. The same day, Metlock issued a credit memo covering the defective merchandise and asked that it be returned at Metlock's expense. Metlock estimates the returned items to have a fair value of $140. The freight on the returned merchandise was $20 paid by Metlock on July 7. On July 12, the company received a check for the balance due from Black. Your answer is partially correct. Prepare journal entries for Metlock Company to record all the events noted above assuming sales and receivables are entered at gross selling price. (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 O for the amounts. Record journal entries in the order presented in the problem.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On July 2, 2021, Metlock Company sold to Sue Black merchandise having a sales price of $12,000 (cost $7,200) with
terms of 2/10. n/30. f.o.b. shipping point. Metlock estimates that merchandise with a sales value of $750 will be returned.
An invoice totaling $120, terms n/30, was received by Black on July 6 from Pacific Delivery Service for the freight cost.
Upon receipt of the goods, on July 3, Black notified Metlock that $350 of merchandise contained flaws. The same day,
Metlock issued a credit memo covering the defective merchandise and asked that it be returned at Metlock's expense.
Metlock estimates the returned items to have a fair value of $140. The freight on the returned merchandise was $20
paid by Metlock on July 7. On July 12, the company received a check for the balance due from Black.
Your answer is partially correct.
Prepare journal entries for Metlock Company to record all the events noted above assuming sales and receivables
are entered at gross selling price. (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 O for the amounts. Record journal entries in
the order presented in the problem.)
Account Titles and Explanation
Accounts Receivable
Allowance for Sales Returns
Sales Revenue
(To record sales and sales return at sale price)
Estimated Inventory Returns
Debit
12000
I
450
Credit
750
11250
11
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