Based on the information below, journalize the entries during April 20XX for the Johnson Company...
Question:
Based on the information below, journalize the entries during April 20XX for the Johnson Company and the Hills Company. Both use a perpetual inventory system.
April 4 - Johnson Company sells Hills Company on account merchandise costing $200 for $450, terms 2/10, net 30.
April 10 - Hills Company returns as defective $150 worth of the $450 merchandise received. The Johnson Company's cost is $85.
April 14 - Hills Company pays within the discount period.
What Is A Trade Discount:
It is common practice for companies that sells goods and services on credit to offer a Trade Discount. A Trade Discount is a rebate that is offered (i.e. as a percentage of the selling price) if payment is made by the customer in a given time period.
Answer and Explanation: 1
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View this answerJohnson Company:
Apr 4:
| Account | Dr | Cr |
|---|---|---|
| Accounts receivable | 450 | |
| Sales | 450 | |
| Cost of goods sold | 200 | |
| Inventory | 200 |
Apr 10:
| Account | Dr | Cr |
|---|---|---|
| Sales returns | 150 | |
| A... |
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