i. On February 27th, the company sold goods on account to CUSTOMER, $1,800. The goods had a cost of $900. Dungy uses a perpetual inventory system.
ans--> A/R (debit) $1800
Sales (credit) $1800
Cost of Goods Sold (debit) $900
Merchandise Inventory (credit) $900
ii. On February 27th, the company realized that it recorded collection from customers on February 21 incorrectly. $2,700 was collected from Campos and $950 from Dennison. Adjust the entry accordingly.
Im not sure how i should write the (ii). please help, have test tomorrow.thnx ^_^
To adjust the entry for the collection from customers on February 21, you need to correct the previous record by reducing the incorrect amount and increasing the correct amount. Here's how you can adjust the entry:
1. Determine the incorrect customer collection and the correct customer collection amounts.
In this case, $2,700 was collected from Campos and $950 from Dennison. You need to adjust these amounts in the correct entry.
2. Reverse the incorrect entry related to the collection on February 21.
Assuming the initial entry was:
Accounts receivable (Campos) (debit) $2,700
Accounts receivable (Dennison) (debit) $950
Cash (credit) $3,650
To reverse this entry, you'll adjust it by deducting the incorrect amounts:
Accounts receivable (Campos) (credit) $2,700
Accounts receivable (Dennison) (credit) $950
Cash (debit) $3,650
Note: The above adjustment entries will cancel out the impact of the incorrect entry, bringing the accounts receivable and cash back to their original state before the error.
3. Record the correct entry for the collection on February 21.
To record the correct entry, you'll use the adjusted amounts:
Accounts receivable (Campos) (debit) $2,700
Accounts receivable (Dennison) (debit) $950
Cash (credit) $3,650
By making this adjustment, the correct amounts will be recorded for the collection from each customer on the correct date.
Remember to double-check your adjustments and consult your accounting principles to ensure accurate recording. Good luck with your test!