Prepare the entries to record sale and cash receipt

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Reference no: EM132741873

Question: On June 16, 2013, llano Co. sold merchandise to PascualCo. for 6k terms 2/10, n/30. Shipping costs were 600. Pascual Co, received the goods and llano Co.'s invoice on June 17. On June 24, Pascual Co. sent the payment to llano Co., which llano Co. received on June 25. Both llano Co. and Pascual Co. use the periodic inventory system. The following are several arrangements regarding the shipping costs:

a. Shipping terms are FOB shipping point, freight prepaid. Llano paid the shipping costs on June 16 and added the 600 cost to the invoice sent to Pascual. Pascual remitted 6480 on June 24.:

1. Prepare the entries for llano Co. to record sale and freight payment and the cash receipt.

2. Prepare the entries for Pascual Co. to record the purchase, (with shipping cost added to the invoice from Ilano) and the cash remittance

b. Shipping terms are FOB destination, freight collect. Pascual Co. paid the shipping costs on June 17 and deducted the 600 from the amount owed to llano Co. A copy of the freight bill to llano Co. was provided with the June 24 cash remittance. Pascual Co. remitted 5280 on June 24

Required: 1. Prepare the entries for llano Co. to record sale and cash receipt.

2. Prepare the entries for Pascual Co. to record the purchase, the freight payment, and the cash remittance.

Reference no: EM132741873

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