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Customer return and refund

On December 28, Silverman Enterprises sold $18,500 of merchandise to Beasley Co. with terms 2/10, n/30. The cost of the goods sold was $11,200. On December 31, Silverman prepared its adjusting entries, yearly financial statements, and closing entries. On January 3, Silverman issued Beasley a credit memo for returned merchandise. The returned merchandise originally cost Silverman $2,350 and was billed (invoiced) for $4,000 with terms 2/10, n/30.

a. Journalize the entries by Silverman Enterprises to record the December 28 sale. Beasley paid the balance due on January 7.

Dec. 28	Accounts Receivable-Beasley Co.
	Sales
Dec. 28	Cost of Goods Sold
	Inventory

Feedback

Partially correct

b. Journalize the entries by Silverman Enterprises to record the merchandise returned January 3.

Jan. 3	Customer Refunds Payable
	Accounts Receivable-Beasley Co.
Jan. 3	Inventory
	Estimated Returns Inventory

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Partially correct

c. Journalize the entry to record the receipt of the amount due by Beasley Co. on January 7.

Jan. 7	Cash
	Accounts Receivable-Beasley Co.