question archive The following transactions are for Sailing Boats Ltd
The following transactions are for Sailing Boats Ltd
Subject:FinancePrice: Bought3
The following transactions are for
Sailing Boats Ltd.
1.
On 7 December Sailing Boats Ltd sold
$720,000 of inventory to Ships Ahoy Ltd, terms 2/7, n/30. The cost of the
inventory sold was $480,000.
2.
On 8 December Ships Ahoy Ltd was
granted an allowance of $30,000 for inventory purchased on 7 December.
3.
On 13 December Sailing Boats Ltd
received the balance due from Ships Ahoy Ltd.
Required
Prepare the journal entries to record these transactions on the books of
Sailing Boats Ltd. Sailing Boats uses a perpetual inventory system.
(Credit account titles are automatically
indented when the amount is entered. Do not indent manually. For multiple
debit/credit entries, list accounts in order of magnitude.)
Date
Account and description
Debit
Credit
Dec. 7
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(To record sales)
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(To record cost of sales)
Dec. 8
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Dec. 13
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Assume that Sailing Boats Ltd received the balance due from Ships Ahoy Ltd on 2
January of the following year instead of 13 December. Prepare the journal entry
to record the receipt of payment on 2 January.
(Credit account titles are automatically
indented when the amount is entered. Do not indent manually.)
Date
Account
Debit
Credit
Jan. 2
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