Green Lawn Chemical Company sells lawn and garden chemicals through several hundred garden supply stores and department store garden shops. It was Green Lawn's policy to ship goods to these retailers in late winter on a consignment basis. Periodically, a Green Lawn field representative would count the Green Lawn products on hand at a retailer; based on this count, the previous count, and intervening shipments, it was determined how many items the retailer had sold since the previous count, and the retailer was billed for these goods by Green Lawn.
Required:
a. Assume Green Lawn shipped goods costing Green Lawn $8,400 and with a wholesale price (i.e., price to the retailer, not the end user) of $12,600 to Carson's Garden Shop. Prepare journal entries to record this entry (1) on Green Lawn's books and (2) on Carson's books.
b. Later, the field representative's count indicated that Carson's had sold some of these goods, totaling $6,720 at retail, $5,040 at wholesale, and $3,360 at Green Lawn's cost. Prepare journal entries to reflect these sales (1) on Green Lawn's books and (2) on Carson's books.