Question
Two different companies, Ripper and Berners, entered into the following inventory transactions during December. Both companies use a perpetual inventory system. December 3 Ripper Corporation
Two different companies, Ripper and Berners, entered into the following inventory transactions during December. Both companies use a perpetual inventory system. |
December 3 Ripper Corporation sold inventory on account to Berners Corp. for $482,000, terms 2/10, n/30. This inventory originally cost Ripper $315,000. | |
December 8 Berners Corp. returned inventory to Ripper Corporation for a credit of $3,400. Ripper returned this inventory to inventory at its original cost of $2,222. | |
December 12 Berners Corp. paid Ripper Corporation for the amount owed. |
Required: |
a. | Prepare the journal entries to record these transactions on the books of Ripper Corporation. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) |
Transactions: 1. Record the entry for sale of inventory on account. 2. Record the entry for cost of inventory sold on account from inventories. 3. Record the entry for return of inventory sold on account. 4. Record the entry for reversal of cost of inventory sold on account. 5. Record the entry for receipt of accounts receivable and related sales discount for terms 2/10, n/30.
|
b) What is the amount of net sales to be reported on Ripper Corporation's income statement?
c) What is the Ripper Corporation's gross profit percentage? (Round to the nearest whole percent)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started