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Chp 6 problems Sheet1

Return by cash customer return by a credit customer

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Unformatted text preview: necessary in the records of the selling company to record the receipt of the returned books assuming that (1) the books were returned by a cash customer and (2) the books were returned by a credit customer. Return by cash customer Return by a credit customer PE 6 ­7 Compu+ng Net Sales Use the following compute net sales Sales discount Accounts receivable, ending Gross sales Inventory, ending Sales returns and allowances $50,000 125,000 2,500,000 200,000 75,000 PE 6 ­9 The Allowance Method Morrison Company had credit sales of $2,500,000 during the year, its first year of business. Morrison has es+mated that $50,000 of these sales on account will ul+mately be uncollec+ble. In addi+on, a year ­end review of accounts iden+fied that of the $200,000 in accounts outstanding as of the end of the year, $43,000 were worthless because the business customer associated with those accounts had gone bankrupt. Using the allowance method of accoun+ng for bad debts expense, make the journal entries necessary to record (1) bad debt expense for the y...
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