(Learning Objectives 1, 2: Apply GAAP for proper revenue recognition; accountfor sales returns and allowances) Treno Industries sells to wholesalers. Customers must paywithin 15 days or at the point of sale using a credit card. Treno’s cost of goods sold is 40% ofsales. The company had the following selected transactions during March:March 3 Sold $15,000 of merchandise to Whittier Company on account.Sold $2,000 of merchandise to Yeller Corp., who paid by credit card. The creditcard company charges Treno a fee of 2% on credit card sales.March 4March 15 Whittier Company paid the balance of what it owed for the purchase on March 3.March 19 Sold $22,000 of merchandise to Zucca Co. on account.March 21 Zucca reported that some of the merchandise received was scratched and returned$1,000 worth of merchandise to Treno.March 23 Sold $32,000 of merchandise to Nichols Co. on account.March 25 Zucca paid the balance of what it owed for the purchase on March 19.March 31 Treno made the adjusting entries for the month to accrue for estimated future returns.Treno estimates that 5% of total sales will be returned.March 5 Whittier Company returned $500 of the merchandise from March 3.March 7 Sold $600 of merchandise to Madison, Inc., on account.Requirements1. Record Treno’s transactions, including the cost of goods sold entry for each sale.2. Calculate the gross sales revenue for the month.
(Learning Objectives 1, 2: Apply GAAP for proper revenue recognition; account
for sales returns and allowances) Treno Industries sells to wholesalers. Customers must pay
within 15 days or at the point of sale using a credit card. Treno’s cost of goods sold is 40% of
sales. The company had the following selected transactions during March:
March 3 Sold $15,000 of merchandise to Whittier Company on account.
Sold $2,000 of merchandise to Yeller Corp., who paid by credit card. The credit
card company charges Treno a fee of 2% on credit card sales.
March 4
March 15 Whittier Company paid the balance of what it owed for the purchase on March 3.
March 19 Sold $22,000 of merchandise to Zucca Co. on account.
March 21 Zucca reported that some of the merchandise received was scratched and returned
$1,000 worth of merchandise to Treno.
March 23 Sold $32,000 of merchandise to Nichols Co. on account.
March 25 Zucca paid the balance of what it owed for the purchase on March 19.
March 31 Treno made the
Treno estimates that 5% of total sales will be returned.
March 5 Whittier Company returned $500 of the merchandise from March 3.
March 7 Sold $600 of merchandise to Madison, Inc., on account.
Requirements
1. Record Treno’s transactions, including the cost of goods sold entry for each sale.
2. Calculate the gross sales revenue for the month.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 4 images
