The cash proceeds received by the seller are Meridian company sells goods on credit. On one sale, theysold it for $35,000 and offered a 3/15, net 45 payment option.Five days after sale, the customer complained and theyallowed them a $2,500 sales allowance. The customer paidthe net amount within 12 days after the sale. The cashproceeds received by the seller area. $20,000 b. $19,000 c. $18,600 d. $31,525

Explanation of Sales Allowance:A sales allowance is a reduction in the selling price granted by the…

Answered: Meridian company sells goods on credit.…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 14MC: A customer pays on credit for $1,250 worth of merchandise, terms 4/15, n/30. If the customer pays...

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Similar questions

A customer pays on credit for $1,250 worth of merchandise, terms 4/15, n/30. If the customer pays within the discount window, how much will they remit in cash to the retailer? A. $1,250 B. $1,200 C. $50 D. $500
A car dealership sells a car to a customer for $35,000. The customer makes a 10% down payment, and the dealership finances the remaining 90% in-house. How much will the car dealership record in Accounts Receivable for this customer? A. $31,500 B. $19,250 C. $8,750 D. $7,000
A seller sells $800 worth of goods on credit to a customer, with a cost to the seller of $300. Shipping charges are $100. The terms of the sale are 2/10, n/30, FOB Destination. What, if any, journal entry or entries will the seller record for these transactions?
Pianos Unlimited sells pianos to customers. The company contracts with a supplier who provides it with replacement piano keys. There is an agreement that Pianos Unlimited is not required to provide cash payment immediately, and instead will provide payment within thirty days of the invoice date. Additional information: Pianos Unlimited purchases 400 piano keys for $7 each on September 1, invoice date September 1, with discount terms 2/10, n/30. Pianos Unlimited returns 150 piano keys (receiving a credit amount for the total purchase price per key of $7 each) on September 8. The company purchases an additional 230 keys for $5 each on September 15, invoice date September 15, with no discount terms. The company pays 50% of the total amount due to the supplier on September 24. What amount does Pianos Unlimited still owe to the supplier on September 30? What account is used to recognize this outstanding amount?
Prepare journal entries for the following sales and cash receipts transactions. (a) Merchandise is sold on account for 300 plus 3% sales tax, with 2/10, n/30 cash discount terms. (b) Part of the merchandise sold in transaction (a) for 70 plus sales tax is returned for credit. (c) The balance on account for the merchandise sold in transaction (a) is paid in cash within the discount period.
Air Compressors Inc. purchases compressor parts for its inventory from a supplier. The following transactions take place during the current year: A. On April 5, the company purchases 400 parts for $8.30 per part, on credit. Terms of the purchase are 4/ 10, n/30, invoice dated April 5. B. On May 5, Air Compressors does not pay the amount due and renegotiates with the supplier. The supplier agrees to $400 cash immediately as partial payment on note payable due, converting the debt owed into a short-term note, with a 7% annual interest rate, payable in three months from May 5. C. On August 5, Air Compressors pays its account in full. Record the journal entries to recognize the initial purchase, the conversion plus cash, and the payment.
C. R. McIntyre Company sells candy wholesale, primarily to vending machine operators. Terms of sales on account are 2/10, n/30, FOB shipping point. The following transactions involving cash receipts and sales of merchandise took place in May of this year: May 2Received 411.60 cash from N. Rojas in payment of April 23 invoice of 420, less cash discount. 5Received 2,085 cash in payment of 2,000 note receivable and interest of 85. 8Sold merchandise on account to G. Soto, invoice no. 862, 830. 9Received 11,838.40 cash from D. Maddox in payment of April 30 invoice of 12,080, less cash discount. 15Received cash from G. Soto in payment of invoice no. 862, less cash discount. 16Cash sales for first half of May, 3,259. 19Received 296 cash from R. O. Higgins in payment of April 14 invoice, no discount. 22Sold merchandise on account to N. T. Jennings, invoice no. 863, 753. 25Received 239 cash refund for return of defective equipment bought in April for cash. 28Sold merchandise on account to M. E. Mueller, invoice no. 864, 964. 31Cash sales for second half of May, 4,728. Required 1. Journalize the transactions for May in the cash receipts journal and the sales journal. Assume the periodic inventory method is used. 2. If you are using Working Papers, total and rule the journals. Prove the equality of the debit and credit totals.
Barkers Baked Goods purchases dog treats from a supplier on February 2 at a quantity of 6,000 treats at $1 per treat. Terms of the purchase are 2/10, n/30. Barkers pays half the amount due in cash on February 28 but cannot pay the remaining balance due in four days. The supplier renegotiates the terms on March 4 and allows Barkers to convert its purchase payment into a short-term note, with an annual interest rate of 6%, payable in 9 months. Show the entries for the initial purchase, the partial payment, and the conversion.
Record journal entries for the following transactions of Furniture Warehouse. A. Aug. 3: Sold 15 couches at $500 each to a customer, credit terms 2/15, n/30, invoice date August 3; the couches cost Furniture Warehouse $150 each. B. Aug. 8: Customer returned 2 couches for a full refund. The merchandise was in sellable condition at the original cost. C. Aug. 15: Customer found 4 defective couches but kept the merchandise for an allowance of $1,000. D. Aug. 18: Customer paid their account in full with cash.
Serene Company purchases fountains for its inventory from Kirkland Inc. The following transactions take place during the current year. A. On July 3, the company purchases thirty fountains for $1,200 per fountain, on credit. Terms of the purchase are 2/10, n/30, invoice dated July 3. B. On August 3, Serene does not pay the amount due and renegotiates with Kirkland. Kirkland agrees to convert the debt owed into a short-term note, with an 8% annual interest rate, payable in two months from August 3. C. On October 3, Serene Company pays its account in full. Record the journal entries to recognize the initial purchase, the conversion, and the payment.
American Signs allows customers to pay with their Jones credit card and cash. Jones charges American Signs a 3.5% service fee for each credit sale using its card. Credit sales for the month of June total $328,430, where 40% of those sales were made using the Jones credit card. Based on this information, what will be the total in Credit Card Expense at the end of June?
Window World extended credit to customer Nile Jenkins in the amount of $130,900 for his purchase of window treatments on April 2. Terms of the sale are 2/60, n/150. The cost of the purchase to Window World is $56,200. On September 4, Window World determined that Nile Jenkinss account was uncollectible and wrote off the debt. On December 3, Mr. Jenkins unexpectedly paid in full on his account. Record each Window World transaction with Nile Jenkins. In order to demonstrate the write-off and then subsequent collection of an account receivable, assume in this example that Window World rarely extends credit directly, so this transaction is permitted to use the direct write-off method. Remember, however, that in most cases the direct write-off method is not allowed.

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