Transactions for Buyer and Seller

Wilmington Co. sold merchandise to Rather Co. on account, $9,300, terms 2/15, n/30. The cost of merchandise sold is $5,580. Assume all discounts are taken.

Journalize Wilmington Co.'s entries for (a) the sale on account and (b) the collection of the amount due.

(a)
(b)

Journalize Rather Co.'s entries for (a) the purchase of merchandise on account and (b) the payment of the amount due.

(a)
(b)

Customer allowances and returns

Assume the following data for Lusk Inc. before its year-end adjustments:

	Unadjusted Balances
	Debit	Credit
Sales		$3,600,000
Cost of Merchandise Sold	$2,100,000
Estimated Returns Inventory	1,800
Customer Refunds Payable		900
Estimated cost of merchandise that will be returned in the next year	$15,000
Estimated percent of refunds for current year sales	0.8%

a. Journalize the adjusting entry for the estimated customer allowances.

	Sales

b. Journalize the adjusting entry for the estimated customer returns.