Required information Exercise 7-5 (Algo) Trade and cash discounts; the gross method and the net method compared [LO7-3] [The following information applies to the questions displayed below.] Tracy Company, a manufacturer of air conditioners, sold 200 units to Thomas Company on November 17, 2021. The units have a list price of $450 each, but Thomas was given a 30% trade discount. The terms of the sale were 3/10, n/30. Exercise 7-5 (Algo) Part - 2 3-a. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2021, assuming that the net method of accounting for cash discounts is used. 3-b. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on December 15, 2021, assuming that the net method of accounting for cash discounts is used.
Required information Exercise 7-5 (Algo) Trade and cash discounts; the gross method and the net method compared [LO7-3] [The following information applies to the questions displayed below.] Tracy Company, a manufacturer of air conditioners, sold 200 units to Thomas Company on November 17, 2021. The units have a list price of $450 each, but Thomas was given a 30% trade discount. The terms of the sale were 3/10, n/30. Exercise 7-5 (Algo) Part - 2 3-a. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2021, assuming that the net method of accounting for cash discounts is used. 3-b. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on December 15, 2021, assuming that the net method of accounting for cash discounts is used.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
![Required information
Exercise 7-5 (Algo) Trade and cash discounts; the gross method and the net method compared [LO7-3]
[The following information applies to the questions displayed below.]
Tracy Company, a manufacturer of air conditioners, sold 200 units to Thomas Company on November 17, 2021. The units
have a list price of $450 each, but Thomas was given a 30% trade discount. The terms of the sale were 3/10, n/30.
Exercise 7-5 (Algo) Part - 2
3-a. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2021,
assuming that the net method of accounting for cash discounts is used.
3-b. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on December 15, 2021,
assuming that the net method of accounting for cash discounts is used.
Complete this question by entering your answers in the tabs below.
Req 3A
Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2021, assuming
that the net method of accounting for cash discounts is used. (If no entry is required for a transaction/event, select "No journal entry
required" in the first account field.)
Req 38
View transaction list
Journal entry worksheet
<
1
2
Record the sale of 200 units with a list price of $450, a 30% trade discount (if
applicable), with terms of 3/10, n/30 under the net method.
Note: Enter debits before credits.
Date
November 17, 2021
Record entry
General Journal
Clear entry
<Roq 3A
Debit
Credit
View general journal
Req 38 >
>](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe7549320-9d19-40d2-811e-a018a83c2ca1%2Fa1c36e92-7729-4d04-b25c-925f4d160a21%2Fu1g8vks_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
Exercise 7-5 (Algo) Trade and cash discounts; the gross method and the net method compared [LO7-3]
[The following information applies to the questions displayed below.]
Tracy Company, a manufacturer of air conditioners, sold 200 units to Thomas Company on November 17, 2021. The units
have a list price of $450 each, but Thomas was given a 30% trade discount. The terms of the sale were 3/10, n/30.
Exercise 7-5 (Algo) Part - 2
3-a. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2021,
assuming that the net method of accounting for cash discounts is used.
3-b. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on December 15, 2021,
assuming that the net method of accounting for cash discounts is used.
Complete this question by entering your answers in the tabs below.
Req 3A
Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2021, assuming
that the net method of accounting for cash discounts is used. (If no entry is required for a transaction/event, select "No journal entry
required" in the first account field.)
Req 38
View transaction list
Journal entry worksheet
<
1
2
Record the sale of 200 units with a list price of $450, a 30% trade discount (if
applicable), with terms of 3/10, n/30 under the net method.
Note: Enter debits before credits.
Date
November 17, 2021
Record entry
General Journal
Clear entry
<Roq 3A
Debit
Credit
View general journal
Req 38 >
>
Transcribed Image Text:required" in the first account field.)
View transaction list
Journal entry worksheet
<
1
2
Record the cash collection on November 26.
Note: Enter debits before credits.
Date
November 26, 2021
Record entry
General Journal
Clear entry
Red 3A
Debit
Credit
View general journal
Req 3B >
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