Question
On June 3, 2017, Crane Company sold to Ann Mount merchandise having a sales price of $8,600 (cost $7,300) with terms of 2/10, n/60, f.o.b.
On June 3, 2017, Crane Company sold to Ann Mount merchandise having a sales price of $8,600 (cost $7,300) with terms of 2/10, n/60, f.o.b. shipping point. Crane estimates that merchandise with a sales value of $860 will be returned. An invoice totalling $140, terms n/30, was received by Mount on June 8 from Olympic Transport Service for the freight cost. Upon receipt of the goods, on June 5, Mount notified Crane that $450 of merchandise contained flaws. The same day, Crane issued a credit memo covering the defective merchandise and asked that it be returned at Cranes expense. Crane estimated the returned items to have a fair value of $320. The freight on the returned merchandise was $27, paid by Crane on June 7. On June 12, the company received a cheque for the balance due from Mount.
Prepare journal entries for Crane Company to record all the events noted above, assuming sales and receivables are entered at gross selling price. (Credit account titles are automatically indented when the 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. Record journal entries in the order presented in the problem. Do not round intermediate calculations. Round final answers to 0 decimal places, e.g. 5,225.)
Prepare the journal entry, assuming that Ann Mount did not remit payment until August 5. (Credit account titles are automatically indented when the 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.)
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