The home office of Farah Company ships merchandise to the Nour branch at a billed price that includes a markup 25% on the billed price. The inventories ledger account of the branch, showed a December 31, 2019 debit balance $120,000 ;a debit for a shipment received January 16, 2020 $500,000 , total credits for goods sold during January 2020 $520,000 and January 31, 2020 debit balance $100,000 (all amounts are home office billed price). On January 31, 2020, Nour branch prepared an income statement indicating a net loss of $ 90,000.
The home office of Farah Company ships merchandise to the Nour branch at a billed price that includes a markup 25% on the billed price. The inventories ledger account of the branch, showed a December 31, 2019 debit balance $120,000 ;a debit for a shipment received January 16, 2020 $500,000 , total credits for goods sold during January 2020 $520,000 and January 31, 2020 debit balance $100,000 (all amounts are home office billed price). On January 31, 2020, Nour branch prepared an income statement indicating a net loss of $ 90,000.
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter10: Accounting For Sales And Cash Receipts
Section: Chapter Questions
Problem 2CE: Prepare journal entries for the following sales and cash receipts transactions. (a) Merchandise is...
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Transcribed Image Text:The home office of Farah Company ships merchandise to the Nour branch at a billed price that
includes a markup 25% on the billed price. The inventories ledger account of the branch, showed
a December 31, 2019 debit balance ,$120,000 ;a debit for a shipment received January 16, 2020
$500,000 , total credits for goods sold during January 2020 $520,000 and January 31, 2020 debit
balance $100,000 (all amounts are home office billed price). On January 31, 2020, Nour branch
prepared an income statement indicating a net loss of $ 90,000.
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