The following are transactions between Teal Mountain Corp., the consignor, and Sandhill Stores Ltd., the consignee, for the month of June 2020. Teal Mountain uses a perpetual inventory system and has a separate perpetual record for inventory sent out on consignment. At the end of each month, sales are reported by Sandhill to Teal Mountain and a net payment is made. The agreement stipulates that Sandhill is to receive a 15% (of sales) commission and a 6% (of sales) rebate to offset its advertising expenses. June 1 June 5 June 30 Teal Mountain Corp. ships merchandise costing $452,000 on consignment to Sandhill Stores Ltd. Teal Mountain pays the freight of $5,000 for the above shipment of June 1. Summary entry for the month of June: Sandhill sells half of the merchandise for $675,000 cash. Sandhill notifies Teal Mountain that 50% of the merchandise has been sold for $675,000 and remits a cheque for the amount due under the consignment agreement. Teal Mountain records the receipt of the cheque from Sandhill. June 30 Your answer is partially correct. Prepare the journal entries necessary on the books of Teal Mountain Corp. (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.) Date Account Titles and Explanation Debit Credit June 1 Inventory 452000 finished goods invetory 45 June 5 Inventory on Consignment 5000 Prepare the journal entries necessary on the books of Teal Mountain Corp. (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.) Date Account Titles and Explanation Debit Credit June 1 Inventory 452000 finished goods invetory 4 June 5 Inventory on Consignment 5000 Cash June 30 Cash 533250 Advertising Expense 40500 Commission Expense 101250 Revenue from Consignment Sales (To record consignment sales) June 30 Cost of Goods Sold 226000 Inventory (To record cost of goods sold) Prepare the journal entries necessary on the books of Sandhill Stores Ltd on June 1, June 5 and June 30. (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.) Date Account Titles and Explanation Debit Credit June 1 No Entry 0 No Entry June 5 Receivable from consignor 40500 Cash 40 June 5 Cash 675000 Accounts Payable 67: June 30 Accounts Payable 675000 Accounts Receivable 53: Commission Revenue 40 Cash 10
