Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
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Textbook Question
Chapter 5, Problem 5.55AP
(Learning Objectives 1, 2: Apply GAAP for proper revenue recognition; account for sales returns and allowances) Treno Industries sells to wholesalers. Customers must pay within 15 days or at the point of sale using a credit card. Treno’s cost of goods sold is 40% of sates. The company had the following selected transactions during March:
| March 3 | Sold $15,000 of merchandise to Whittier Company on account. |
| March 4 | Sold $2,000 of merchandise to Yeller Corp., who paid by credit card. The credit card company charges Treno a fee of 2% on credit card soles. |
| March 5 | Whittier Company returned $500 of the merchandise from March 3. |
| March 7 | Sold $600 of merchandise to Madison, Inc., on account. |
| March 15 | Whittier Company paid the balance of what it owed for the purchase on March J. |
| March 19 | Sold $22,000 of merchandise to Zucca Co. on account. |
| March 21 | Zucca reported that some of the merchandise received was scratched and returned $1,000 worth of merchandise to Treno. |
| March 23 | Sold $32,000 of merchandise to Nichols Co. on account. |
| March 25 | Zucca paid the balance of what it owed or the purchase on March 19. |
| March 31 | Treno made the |
Requirements
- 1. Record Treno’s transactions, including the cost of goods sold entry for each sale.
- 2. Calculate the gross sales revenue for the month.
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Chapter 5 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
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Revenue recognition explained; Author: The Finance Storyteller;https://www.youtube.com/watch?v=816Q6pOaGv4;License: Standard Youtube License