Prepare the Journal Entries to Record the Following Transactions on Markowitz

question 115

Essay

Prepare the journal entries to record the following transactions on Markowitz Company's books using a perpetual inventory system. On February 6, Markowitz Company sold $105,000 of merchandise to the Lyman Company, terms 2/10, net /30. The cost of the merchandise sold was $70,000. On February 8, the Lyman Company returned $14,000 of the merchandise purchased on February 6. The cost of the merchandise returned was $7,000. On February 16 Markowitz Company received the balance due from the Lyman Company.

---

Definitions:

Pretax Return

The income generated by an entity before the deduction of taxes.

Internal Rate of Return

A measure of an investment's rate of return. It is the discount rate that makes the net present value of all cash flows from a particular project equal to zero.

Cash Inflow

Cash inflow, mentioned again, refers to the inflow of funds into a business from various activities, highlighting its importance in assessing a company’s financial health.

Cash Operating Costs

Expenses related to the day-to-day operational activities of a business, paid in cash.