Need some accounting help..

Question

how do u record the ff transactions:

(Company A's policy is to ship goods to retailers on consignment basis)

a. assume company A shipped goods costing company A $8400 and with a wholesale price (i.e., price to the retailer, not the end user) of $12600 to Shop B. Prepare journal entries to record this entry in (1.) company A's bks; (2) Shop B's books.

b. later, the field representative's count indicated that Shop B had sold some of these goods, totalling $6720 in retail, $5040 at wholesale and $3360 at Company A's cost. Prepare journal entries to reflect these sales in 1.)Company A's books; 2.)shop B's books

THANK YOU

Answer 1

a. assume company A shipped goods costing company A $8400 and with a wholesale price (i.e., price to the retailer, not the end user) of $12600 to Shop B. Prepare journal entries to record this entry in (1.) company A's bks; (2) Shop B's books.

No accounting entries are needed since the goods are only on consignment.

b. later, the field representative's count indicated that Shop B had sold some of these goods, totalling $6720 in retail, $5040 at wholesale and $3360 at Company A's cost. Prepare journal entries to reflect these sales in 1.)Company A's books; 2.)shop B's books

1.)Company A's books

Dr  AR - Shop B $5,040

Cr  Sales $5,040

Dr  COGS $3,360

Cr  Merchandize inventory $3,360

2.)shop B's books

Dr  Cash/AR $6,720

Cr  Sales

Dr  COGS $5,040

Cr  AP - Co. A $5,040