Question

Exercise 5-3 The following transactions are for Sunland Company. 1. 2. 3. On December 3, Sunland Company sold $473,800 of merchandise to Blossom Co., terms 2/10, n/30. The cost of the merchandise sold was $320,000. On December 8, Blossom Co. was granted an allowance of $22,800 for merchandise purchased on December 3. On December 13, Sunland Company received the balance due from Blossom Co. (a) Prepare the journal entries to record these transactions on the books of Sunland Company. Sunland Company uses a perpetual inventory system. (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date Account Titles and Explanation Debit Credit 1. (To record credit sale) (To record cost of merchandise sold) 2. 3. Dec. 13 (b) Assume that Sunland Company received the balance due from Blossom Co. on January 2 of the following year instead of December 13. Prepare the journal entry to record the receipt of payment on January 2. (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Click if you would like to Show Work for this question: Open Show Work

Answer 1

Journal entry

Date	General Journal	Debit	Credit
Dec 3	Account receivable	473800
	Sales revenue		473800
	(To record sales)
	Cost of goods sold	320000
	Merchandise inventory		320000
	(To record cost of goods sold)
Dec 8	Sales return and allowance	22800
	Account receivable		22800
Dec 13	Cash (451000*98%)	441980
	Sales discount	9020
	Account receivable (473800-22800)		451000

b) Journal entry

Date	account and explanation	Debit	Credit
Jan 2	Cash	451000
	Account receivable (473800-22800)		451000