Exercise 5-05 a-b

Presented below are transactions related to Novak Corp..

1.		On December 3, Novak Corp. sold $644,700 of merchandise on account to Sarasota Co., terms 4/10, n/30, FOB shipping point. The cost of the merchandise sold was $363,600.
2.		On December 8, Sarasota Co. was granted an allowance of $27,400 for merchandise purchased on December 3.
3.		On December 13, Novak Corp. received the balance due from Sarasota Co.

Prepare the journal entries to record these transactions on the books of Novak Corp. using a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

No.	Date	Account Titles and Explanation	Debit	Credit
1.	Dec. 3Dec. 8Dec. 13Jan. 2
		(To record credit sale)
	Dec. 3Dec. 8Dec. 13Jan. 2
		(To record cost of merchandise sold)
2.	Dec. 3Dec. 8Dec. 13Jan. 2
3.	Dec. 3Dec. 8Dec. 13Jan. 2

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Assume that Novak Corp. received the balance due from Sarasota Co. on January 2 of the following year instead of December 13. Prepare the journal entry to record the receipt of payment on January 2. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 3Dec. 8Dec. 13Jan. 2

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