The following merchandise transactions occurred in December. Both companies use a perpetual inventory system. Dec. 3 Pictou
Question:
The following merchandise transactions occurred in December. Both companies use a perpetual inventory system.
Dec. 3 Pictou Ltd. sold $18,000 of merchandise to Thames Corp., terms 2/10, n/30, FOB shipping point. The cost of the merchandise sold was $10,000.
7 Shipping costs of $450 were paid by the appropriate company.
8 Thames returned unwanted merchandise to Pictou. The returned merchandise has a sales price of $1,200, and a cost of $650. It was restored to inventory.
11 Pictou received the balance due from Thames.
Instructions
(a) Record the above transactions in the books of Pictou.
(b) Record the above transactions in the books of Thames.
(c) Calculate the gross profit earned by Pictou on the above transactions.
Step by Step Answer:
a Dec 3 Accounts Receivable 18000 Sales 18000 3 Cost of Goods Sold 10000 Merchan...View the full answer
Financial Accounting Tools for Business Decision Making
ISBN: 978-1118644942
6th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
