Prepare the journal entries required by the transactions

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Cullumber Manufacturing Inc. shipped finished goods inventory with a total cost of $56,500 to FFA Retailing Ltd. on May 1. The agreement between the two companies was that FFA was to sell the product on consignment for Cullumber Manufacturing. Cullumber incurred $4,900 in shipping costs in order to ship the merchandise. FFA paid a local newspaper $3,200 for advertising costs (which Cullumber promised to reimburse). At September 30, the end of the accounting year for both companies, FFA had sold 75% of the merchandise for total sales of $60,200. FFA notified Cullumber of the sales, retained a 20% commission, and remitted the cash due to Cullumber.

Problem a) Prepare the journal entries required by the above transactions on the books of Cullumber Manufacturing.

Problem b) Prepare the journal entries required by the above transactions on the books of FFA Retailing.

Reference no: EM132678903

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