Exercise 5-3

The following transactions are for Oriole Company.

1.		On December 3, Oriole Company sold $492,200 of merchandise to Cullumber Co., terms 2/10, n/30. The cost of the merchandise sold was $325,100.
2.		On December 8, Cullumber Co. was granted an allowance of $22,900 for merchandise purchased on December 3.
3.		On December 13, Oriole Company received the balance due from Cullumber Co.

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

(b) Assume that Oriole Company received the balance due from Cullumber 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. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

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