Merchandise with a List Price of $7,500 and a Cost

question 103

Essay

Merchandise with a list price of $7,500 and a cost of $7,000 is sold on account,terms 1/10,n/30.Prior to payment,merchandise with a list price of $1,000 and a cost of $800 is returned.The correct amount is paid within the discount period.
Record the following transactions,using the integrated financial statement framework that follows:

Assets = Liabilities + Stockholders' Equity
Cash
Accounts Receivable
Merchandise Inventory
Accounts Payable
Capital Stock
Retained Earnings
a.

Assets = Liabilities + Stockholders' Equity
Cash
Accounts Receivable
Merchandise Inventory
Accounts Payable
Capital Stock
Retained Earnings
b.

Assets = Liabilities + Stockholders' Equity
Cash
Accounts Receivable
Merchandise Inventory
Accounts Payable
Capital Stock
Retained Earnings
c.

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Definitions:

Cash Dividends

Distributions of a company's earnings to shareholders in the form of cash.

Dividends Payable

A liability recorded when a company declares dividends but has not yet paid them to shareholders.

Cash Payments

Outflows of cash made by a business, including expenses, creditor payments, and other liabilities, during a specific period.

Statement of Cash Flows

It's a financial document summarizing the total cash entering a company from operational earnings and investment revenues, as well as the cash spent on business-related activities and investment outlays during a specific period.