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

13th Edition

ISBN: 9781337816045

Author: WARREN

Publisher: CENGAGE L

See similar textbooks

Concept explainers

The Effect Of Prepaid Taxes On Assets And Liabilities

Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can resu…

Final Accounts

Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.

Ledger Posting

A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the a…

Trial Balance and Final Accounts

In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately…

Adjustment Entries

At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial repor…

Videos

Question

Chapter 5, Problem 5.3BPE

To determine

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

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

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 5, Problem 5.3APE

Chapter 5, Problem 5.4APE

Students have asked these similar questions

Can you solve this general accounting problem using accurate calculation methods?

Determine the total manufacturing costs?

Prada manufacturing had a work in process balance of 72000

Chapter 5 Solutions

FINANCIAL AND MANAGERIAL ACCOUNTING

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

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

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

Solution Summary: The author explains that sales is an activity of selling the merchandise inventory of a business.