Exercises 18-2,18-5,18-6

Jansen Corporation shipped $20,000 of merchandise on consignment to Gooch Company. Jansen paid freight costs of $2,000. Gooch Company paid $500 for local advertising, which is reimbursable from Jansen. By year-end, 60% of the merchandise had been sold for $21,500. Gooch notified Jansen, retained a 10% commission, and remitted the cash due to Jansen.

Prepare Jansen’s entry when the cash is received. (Round answers to 0 decimal places, e.g. 1,525. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit
[removed]	[removed]	[removed]
[removed]	[removed]	[removed]
[removed]	[removed]	[removed]
[removed]	[removed]	[removed]
(To record the cash remitted to Jansen.)
[removed]	[removed]	[removed]
[removed]	[removed]	[removed]
(To record the cost of inventory sold on consignment.)

Telephone Sellers Inc. sells prepaid telephone cards to customers. Telephone Sellers then pays the telecommunications company, TeleExpress, for the actual use of its telephone lines. Assume that Telephone Sellers sells $4,000 of prepaid cards in January 2014. It then pays TeleExpress based on usage, which turns out to be 50% in February, 30% in March, and 20% in April. The total payment by Telephone Sellers for TeleExpress lines over the 3 months is $3,000.

Indicate how much income Telephone Sellers should recognize in January, February, March, and April.

January income		$[removed]
February income		$[removed]
March income		$[removed]
April income		$[removed]