E5-1A

, New Revenue Recognition Standard-Aagusl 12 eal t to McDowell for the merchandise was $300,000. To encourage early payment, McDowell o redit terms of 1/10, n/30. At year-end, there is $125,000 of sales on account sti igible for the 1 percent discount. McDowell believes that all customers will pay within the discour period to receive the discount. Prepare the adjusting journal entry needed for McDowell Corporatic to comply with the new revenue recognition standard. Assume McDowell's fiscal year-end is Decen ration reports it sold merchandise on account for a total of $800,000 for the currel fers its customers c -13. New Revenue Recognition Standard-Adjusting Journal Entries-Sales Returns and Allov ances During the year, Reed Company sells merchandise on account totaling $2,000,000 (the cost Reed for this merchandise was $800,000). Reed allows a 60-day return privilege for the merchandi it sells. At year-end, Reed estimates there remain $350,000 of sales (with a cost to Reed of $140.00 that are still within the 60-day return period. Based on past experience, Reed expects 5 percent of th merchandise to be returned. Prepare the period-end adjusting journal entries needed for Reed Con pany to comply with the new revenue recognition standard. Reed's fiscal year-end is December 31 ber 31 XERCISES-SETA ES1A. Cash Discount Calculations On June 1, Forest Company sold merchandise with a list price $30,000. For each of the sales terms below, determine the proper amount of cash recei Date Paid June 8 June 15 June 14 June 28 Credit Terms I. 2/10, n/30 2 1/10, n/30 3. 1/15, n/30 n/30 ES-2A. Journal Entries for Sale, Return, and Remittance-Perpetual System On September 13, Bra Company sold merchandise with an invoice price of $1,100 ($600 cost), with terms of 2/10, n/30 Dalton Company. On September 17, $250 of the merchandise ($100 cost) was returned because was the wrong model. On September 23, Brady Company received a check for the amount due fr Dalton Company Required Prepare the journal entries made by Brady Company for these transactions. Brady uses the inventory system. ES-3A. Journal E selman Company purchased $25 000 of merchandise from the Krausman Company, with terms of l il 15, Kesselman paid $500 to Ace Trucking Company for freight on the shipment. On A he Iman Company returned $800 of merchandise for credit. Final payment was made to Kra man on April 22. Kesselman Company records purchases using the perpetual inventory system. Required Prepare the journal entries that Kesselman Company should make on April 13, 15, 18, and 22