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Prepare the journal entries to record the following transactions on McLeena Company's books using a perpetual inventory system.(a) On March 2, Borst Company sold $800,000 of merchandise to McLeena Company on account, terms 2/10, n/30. The cost of the merchandise sold was $540,000. (b) On March 6, McLeena Company returned $140,000 of the merchandise purchased on March 2. The cost of the merchandise returned was $94,000. (c) On March 12, Borst Company received the balance due from McLeena Company.

Answer :

Answer:

Journal Entry are given below

Explanation:

solution

Journal Entry are as

PERPETUAL INVENTORY SYSTEM

                                                                         debit                  credit

(1) March 2, Merchandise inventory               $800,000                      

                   Borst Company                                                       $800,000

               ( record Inventory purchase )

(2)  March 6,

                    Borst Company                             $140,000

                    Merchandise inventory                                           $140,000

                   ( record goods return )

(3) March 12,

                 Borst Company (800000-140000)     $660,000

                Cash  (800000-140000) ×98%                                 $646,800

                 Merchandise inventory                                               $13,200

                 (800000-140000)× 2%

                 ( record goods return )

Journal entries are the records of the credit and debit transactions. The journal entries for the transactions on McLeena Company's books are attached in the image below.

What are Journal Entries?

The economic and the non-economical transactions are recorded in the entry data that lists the transactions of the companies debit and credit record in the accounting general.

On March, 2 the Borst Company sold the merchandise to McLeena Company for $800,000. In March,6 $140,000 worth of merchandise was returned by the McLeena Company to the Borst Company.

On March, 12 the total debit of the Borst Company is,

[tex]800000-140000 = \$660,000[/tex]

The total credit of the company is, [tex](800000-140000) \times 98 \% = \$646800[/tex]

The credit amount of the merchandise company is,

[tex](800000-140000) \times 2\% = \$13,200[/tex]

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