5-5 - Date General Journal Debit Credit May 15 Sales...

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Page 5 of 11 http://ezto.mhhm.mcgraw-hill.com/hm_accounting.tpx?todo=printview 4. award: 1 out of 1 point May 5 Accounts Receivable 7,920 Sales 7,920 May 5 Cost of Goods Sold 5,040 Merchandise Inventory 5,040 (a) On May 7, Radica returns 251 units because they did not fit the customer's needs. Mechanic Parts restores the units to its inventory. Date General Journal Debit Credit May 7 Sales Returns and Allowances 2,761 Accounts Receivable 2,761 May 7 Merchandise Inventory 1,757 Cost of Goods Sold 1,757 (b) On May 8, Radica discovers that 60 units are damaged but are still of some use and, therefore, keeps the units. Mechanic Parts sends Radica a credit memorandum for $180 to compensate for the damage. Date General Journal Debit Credit May 8 Sales Returns and Allowances 180 Accounts Receivable 180 (c) On May 15, Radica discovers that 72 units are the wrong color. Radica keeps 43 of these units because Mechanic sends a $92 credit memorandum to compensate. However, Radica returns the remaining 29 units to Mechanic. Mechanic restores the 29 returned units to its inventory.
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Unformatted text preview: Date General Journal Debit Credit May 15 Sales Returns and Allowances 411 Accounts Receivable 411 May 15 Merchandise Inventory 203 Cost of Goods Sold 203 Mechanic Parts was organized on May 1, 2009, and made its first purchase of merchandise on May 3. The purchase was for 1,200 units at a price of $7 per unit. On May 5, Mechanic Parts sold 720 of the units for $11 per unit to Radica Co. Terms of the sale were 2/10, n/60. Prepare the appropriate journal entries for Radica Co. to record the May 5 purchase and each of the three separate transactions a through c . Radica is a retailer that uses a perpetual inventory system and purchases these units for resale. (Omit the "$" sign in your response.) Date General Journal Debit Credit May 5 Merchandise Inventory 7,920 Accounts Payable 7,920 (a) On May 7, Radica returns 251 units because they did not fit the customer's needs. Mechanic Parts...
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