Question

On October 5, Ivanhoe Company buys merchandise on account from Pharoah Company. The selling price of the goods is $5,240, and the cost to Pharoah Company is $3,180. On October 8, Ivanhoe Company returns defective goods with a selling price of $640 and a scrap value of $310. Record the transactions on the books of Pharoah Company, assuming a perpetual approach. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit choose a transaction date enter an account title to record credit sales Inventory enter a debit amount enter a credit amount enter an account title to record credit sales Accounts Payable enter a debit amount enter a credit amount (To record credit sales) enter an account title to record cost of goods sold on account Accounts Payable enter a debit amount enter a credit amount enter an account title to record cost of goods sold on account Inventory enter a debit amount enter a credit amount (To record cost of goods sold on account) choose a transaction date enter an account title to record credit granted for receipt of returned goods Accounts Receivable enter a debit amount enter a credit amount enter an account title to record credit granted for receipt of returned goods Sales Revenue enter a debit amount enter a credit amount (To record credit granted for receipt of returned goods) enter an account title to record scrap value of goods returned enter a debit amount enter a credit amount enter an account title to record scrap value of goods returned enter a debit amount enter a credit amount (To record scrap value of goods returned)

Answer 1

Answer:

From Pharaoh's point of view:

October 5, merchandise sold on account to Ivanhoe Company

Dr Accounts receivable 5,240

    Cr Sales revenue 5,240

Dr Cost of goods sold 3,180

    Cr Inventory 3,180

October 8, defective merchandise is returned

Dr Sales returns and allowances 640

    Cr Accounts receivable 640

Dr Inventory 310

    Cr Cost of goods sold 310

From Ivanhoe's point of view:

October 5, merchandise sold on account from Pharaoh Company

Dr Inventory 5,240

    Cr Accounts payable 5,240

October 8, defective merchandise is returned

Dr Accounts payable 640

    Cr Inventory 640