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Journal Entries needed to recognize revenue at the point of sale Pat's Electronics Division sells computers through agents in various cities. Agents...

Journal Entries needed to recognize revenue at the point of sale


Pat's Electronics Division sells computers through agents in various cities. Agents send orders and down payments to our company. The division then ships the goods F.O.B. shipping point directly to the customers. Revenue is recognized at the point of sale.



Additional Financial Data:
Orders for fiscal year 2012 $ 3,000,000
Down Payments collected in 2012 $ 300,000
Billed and shipped in 2012 $ 2,400,000
Freight billed in 2012 $ 70,000
Commissions paid to Agents (after ship to customer) 10%
Warranty Returns as % of Sales 1%

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Dear Student Please find... View the full answer

Accounting-8202562.xls

SOLUTION:
Journal Entries in the books of Pat Electronics
Particulars
Accounts Receivable
Sales
(Goods sold.)
Commission
Cash
(Commission paid to agent.) Debit Credit $3,070,000.00
$3,070,000.00...

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