90.2K

Verified Solution

Link Copied!

Use this information for the next three questions. On December 26^th, Johnson and Johnson sent an invoice to Costco for $2.0M for products in their west coast warehouses. Shipping is supposed to be same day. On December 31^st, Costco remitted a payment for the $2.0M. Teresa is working the Johnson and Johnson audit and notices that the shipment was delayed until January 3^rd. The said inventory has a valuation of $1.5M.

For the three transactions listed above (sending of invoice, payment to J&J, and shipment of inventory), give the journal entries for each of them.

12/26/XX

DR ____________________________

CR____________________________

12/31/XX

DR ____________________________

CR____________________________

01/03/XX

DR ____________________________

CR____________________________

What should Teresas proposed Adjusting Journal Entries be (if any) to correct the above transactions?

DR ____________________________

CR____________________________

Memo (reason for AJE) ______________________________________________

DR ____________________________

CR____________________________

Memo (reason for AJE) ______________________________________________

DR ____________________________

CR____________________________

Memo (reason for AJE) ______________________________________________

Answer & Explanation Solved by verified expert

See Answer