Answer to Question #273881 in Economics for Abdul

Question

On January 1st, “A” Company sold 50,000 . worth of goods to “B” Company with a sale discount of 5,000 . which result 45,000 . in net. On January 2nd, “B” Company returned 10,000 . worth of the goods, 3,000 . of it were defected goods and the rest of it didn’t comply with “B” Company requirements. What are the required Journal entries to be made in both companies?

Answer 1

“A” Company:

proceeds debit 45000 inventory credit 45000

inventory debit 7,000 defect debit 3,000 proceeds credit 10,000

“B” Company:

inventory debit 45,000 expense 45,000 credit

expense debit 10,000 inventory credit 10,000