Answer:
In the books of Wildhorse Company
a. Journal Entries:
June 10:
Debit Inventory $7,000
Credit Accounts Payable (Sandhill Company) $7,000
To record the purchase of merchandise, terms 3/10, n/30.
June 11:
Debit Freight-in $430
Credit Cash $430
To record the payment of freight costs.
June 12:
Debit Accounts payable (Sandhill Company) $300
Credit Inventory $300
To record the return of goods for credit.
June 19:
Debit Accounts payable (Sandhill Company) $6,300
Credit Cash $6,099
Credit Cash Discount $201
To record the payment on account.
b. In the books of Sandhill Company
June 10:
Debit Accounts Receivable (Sandhill Company) $7,000
Credit Sales Revenue $7,000
To record the sale of merchandise, terms 3/10, n/30.
Debit Cost of Goods Sold $2,180
Credit Inventory $2,180
To record the cost of goods sold.
June 12:
Debit Sales Returns $300
Credit Accounts receivable (Sandhill Company) $300
To record the return of goods for credit.
Debit Inventory $200
Credit Cost of goods sold $200
To record the cost of goods returned.
June 19:
Debit Cash $6,099
Debit Cash Discount $201
Credit Accounts receivable (Sandhill Company) $6,300
To record the receipt of cash on account.
Explanation:
The entries in the books of Sandhill Company and Wildhorse Company are opposite in some respects. However, not every transaction affects the two companies equally.
