Sims Company regularly sells merchandise to Laurier Supply on terms 2/15, n/30 and records sales at gross. During a recent month, the two firms engaged in the following transactions: a. Sims sold merchandise with a list price of $38,400. b. Sims sold merchandise with a list price of $48,000. c. Laurier paid for the purchase in Transaction a within the discount period. d. Laurier paid for the purchase in Transaction b after the discount period. Required: 1. Provide the journal entries for Sims to record the sales in Transactions a and b. (a) Record sale (b) Record sale 2. Record the journal entry for Sims to record the receipt of Laurier's payment in Transaction c. For those boxes in which no entry is required, leave the box blank. (c) Record collection of cash within discount period 3. Record the journal entry for Sims to record the receipt of Laurier's payment in Transaction d. (d) Record collection of cash after discount period 4. CONCEPTUAL CONNECTION: What implied annual interest rate is Laurier incurring by failing to take the sales discount and, instead, paying the gross amount after 30 days? If required, round your answer to two decimal places. %

Sims Company regularly sells merchandise to Laurier Supply on terms 2/15, n/30 and records sales at gross. During a recent month, the two firms engaged in the following transactions: a. Sims sold merchandise with a list price of $38,400. b. Sims sold merchandise with a list price of $48,000. c. Laurier paid for the purchase in Transaction a within the discount period. d. Laurier paid for the purchase in Transaction b after the discount period. Required: 1. Provide the journal entries for Sims to record the sales in Transactions a and b. (a) Record sale (b) Record sale 2. Record the journal entry for Sims to record the receipt of Laurier's payment in Transaction c. For those boxes in which no entry is required, leave the box blank. (c) Record collection of cash within discount period 3. Record the journal entry for Sims to record the receipt of Laurier's payment in Transaction d. (d) Record collection of cash after discount period 4. CONCEPTUAL CONNECTION: What implied annual interest rate is Laurier incurring by failing to take the sales discount and, instead, paying the gross amount after 30 days? If required, round your answer to two decimal places. %

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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