On June 3, 2014, Hunt Company sold to Ann Mount merchandise having a sales price of $8,320 (cost $5,824) with terms of 2/10, n/60, f.o.b. shipping point. Hunt estimates that merchandise with a sales value of $832 will be returned. An invoice totaling $125, terms n/30, was received by Mount on June 8 from Olympic Transport Service for the freight cost.
Upon receipt of the goods, on June 5, Mount notified Hunt that $312 of merchandise contained flaws. The same day, Hunt issued a credit memo covering the defective merchandise and asked that it be returned at Hunt's expense. Hunt estimates the returned items to have a fair value of $125. The freight on the returned merchandise was $25, paid by Hunt on June 7. On June 12, the company received a check for the balance due from Mount.
Prepare the journal entries for Hunt Company to record all the events noted above, assuming that the sales and receivables are entered at the gross selling price.
Prepare the journal entry assuming that Ann Mount did not remit payment until August 5.
Merchandise & Retail Businesses:
A merchandise or retail business is an entity that focuses on selling goods (merchandise) to buyers for a profit, either on a cash or credit basis. These transactions are recorded by way of a journal entry, which includes the date of the transaction, the amount of the transaction (credit or debit) and a description of, or a reference number for, the transaction.
Answer and Explanation:
The journal entries for Hunt Company to record all the given events, assuming sales and receivables are entered at the gross selling price, can be...
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from Principles of Marketing: Help and ReviewChapter 1 / Lesson 8