Nike uses the perpetual inventory system and sells $300,000 of sporting goods to Sears under credit terms of 1/10, net 30 on April 10, 2017. Nike’s cost of the goods is $210,000, and it receives the appropriate amount of cash from Sears on April 20, 2017.
Journalize Nike’s transactions on April 10, 2017, and April 20, 2017. How much gross margin did Nike earn on this sale?
SOLUTION
Nike’s entries:
| Apr. 10 | Accounts Receivable | 300,000 | ||
|---|---|---|---|---|
| Sales Revenue | 300,000 | |||
| Sale on account. | ||||
| Cost of Goods Sold | 210,000 | |||
| Inventory | 210,000 | |||
| Recorded cost of goods sold. | ||||
| Apr. 20 | Cash* | 297,000 | ||
| Sales Discounts** | 3,000 | |||
| Accounts Receivable | 300,000 | |||
| Cash collection within the discount period. |
🔒
Unlock the complete assignment
You are viewing the free preview. Purchase this assignment once to reveal the complete resource.
$9.99 USD
Secure checkout is completed by Stripe.