Explanation a. Record the journal entry for the sale of inventory on account. Date Accounts and Explanation Debit ($) Credit ($) Accounts Receivable 91,575 (1) To Sales 91,575 (To record the sale of inventory on account after discount) Table (1) Working Note: Calculate the amount of accounts receivable. Sales = $92,500 Discount Percentage = 1% Amount of accounts receivable } = Sales − Discount = Sales − ( Sales × 1 % ) = $92,500 – ( $ 92 , 500 × 1 % ) = $92,500 − $ 925 = $ 91 , 575 (1) Accounts Receivable is an asset and it is increased by $91,575. Therefore, debit account receivable with $91,575

Bundle: Financial & Managerial Accounting, 13th + CengageNOWv2, 2 terms (12 months) Printed Access Card

13th Edition

ISBN: 9781305618909

Author: Carl Warren, James M. Reeve, Jonathan Duchac

Publisher: Cengage Learning

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Chapter 5, Problem 5.3BPE

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Sales is an activity of selling the merchandise inventory of a business.

To Record: The sales transactions in the books of the company.

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Bundle: Financial & Managerial Accounting, 13th + CengageNOWv2, 2 terms (12 months) Printed Access Card

Ch. 5 - Prob. 1DQ Ch. 5 - Prob. 2DQ Ch. 5 - The credit period during which the buyer of...Ch. 5 - What is the meaning of (A) 1/15, n/60; (B) n/30;...Ch. 5 - How are sales to customers using .MasterCard and...Ch. 5 - Prob. 6DQ Ch. 5 - Prob. 7DQ Ch. 5 - Name three accounts that would normally appear in...Ch. 5 - Audio Outfitter Inc., which uses a perpetual...Ch. 5 - Prob. 10DQ

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Sales is an activity of selling the merchandise inventory of a business. To Record: The sales transactions in the books of the company.

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