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On June 3, 2017, Ivanhoe Company sold to Ann Mount merchandise having a sales price of $9,000 (cost $7,900) with terms of 2/10, n/60, f.o.b.
On June 3, 2017, Ivanhoe Company sold to Ann Mount merchandise having a sales price of $9,000 (cost $7,900) with terms of 2/10, n/60, f.o.b. shipping point. Ivanhoe estimates that merchandise with a sales value of $900 will be returned. An invoice totalling $130, 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 Ivanhoe that $300 of merchandise contained flaws. The same day, Ivanhoe issued a credit memo covering the defective merchandise and asked that it be returned at Ivanhoe's expense. Ivanhoe estimated the returned items to have a fair value of $120. The freight on the returned merchandise was $23, paid by Ivanhoe on June 7. On June 12, the company received a cheque for the balance due from Mount. Prepare journal entries for Ivanhoe 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 o for the amounts. Record journal entries in the order presented in the problem. Do not round intermediate calculations. Round final answers to o decimal places, e.g. 5,225.) Date Account Titles and Explanation Debit Credit (To record sales.) June 3, 2017 (To record cost of goods sold.) (To reduce refund liability.) June 5, 2017 (To reduce estimated inventory returns.) June 12, 2017 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 o for the amounts.) Account Titles and Explanation Debit Credit Date August 5, 2017
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