GL0501 (Algo) - Based on Problem 5-1A LO P1, P2
stumped on this journal entry...
AND
IMPACT ON INCOME
July 19 Sold merchandise that cost $2,800 to Cabela Company for $4,000 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19. July 21 Gave a price reduction (allowance) of $800 to Cabela Company for merchandise sold on July 19 and credited Cabela's accounts receivable for that amount. July 24 Paid King Company the balance due, net of discount. July 30 Received the balance due from Cabela Company for the invoice dated July 19, net of discount. Jul 30 Cash Sales discounts Accounts receivable - Cabela 4,000 3,136 X For each transaction, indicate the impact each item had on income and the dollar amount of the change in income, if any. Decreases in net income should be entered with a minus sign. Upon completion, compare the gross profit with the amount reported on the partial income statement. Impact on income Increase (decrease) to income July 1) Purchased merchandise from Wilson Company for $8,800 under credit terms of 1/15, n/30, FOB shipping point, No impact on income invoice dated July 1. July 2) Sold merchandise to Lee Company for $2,300 under $ 2,300 credit terms of 2/10, n/60, FOB shipping point, invoice dated Increases net income July 2. July 2) The cost of the merchandise sold to Lee Company was $1,380. July 3) Paid $685 cash for freight charges on the purchase of July 1. July 8) Sold merchandise for $4,500 cash. Increases net income 4,500 July 8) The cost of the merchandise sold was $2,700. July 9) Purchased merchandise from King Company for $3,600 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9. No impact on income July 11) Received a $700 credit memorandum from King Company for the return of part of the merchandise purchased on July 9. July 12) Received the balance due from Lee Company for the invoice dated July 2, net of the discount. July 16) Paid the balance due to Wilson Company within the No impact on income discount period. July 19) Sold merchandise to Cabela Company for $4,000 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19. July 19) The cost of the merchandise sold to Cabela Company was $2,800. July 21) Issued a $800 credit memorandum to Cabela Company for an allowance on goods sold on July 19. July 24) Paid King Company the balance due, net of discount. July 30) Received the balance due from Cabela Company for the invoice dated July 19, net of discount. July 31) Sold merchandise to Lee Company for $9,800 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31. July 31) The cost of the merchandise sold to Lee Company was $5,900. Total gross profit 6,800
