(a)
Sales discounts:
The term
Sale revenue recognition and the collection from the sales revenue are two different things because the sale revenue includes outstanding sales whereas the collection from the sales excludes advancement payments.
To compute:
The calculation of sales revenue for
Answer to Problem 63E
The sales revenue for the year
Explanation of Solution
The Citron Mechanical Systems sold on credit for
The sales revenue for the year
Thus, the revenue for the Citron Mechanical Systems is
(b)
Sales discounts:
The term
Sale revenue recognition and the collection from the sales revenue are two different things because the sale revenue includes outstanding sales whereas the collection from the sales excludes advancement payments.
To calculate:
The amount of cash collected from these sales.
Answer to Problem 63E
The amount of cash collected from these sales is
Explanation of Solution
The Citron Mechanical Systems sold on credit for
| Sale Revenue within discount period | |
| Less: Discount @ 1% | |
| Collection | |
| Collection from sales after discount | |
| Collection from Sales |
(c)
Sales discounts:
The term
Sale revenue recognition and the collection from the sales revenue are two different things because the sale revenue includes outstanding sales whereas the collection from the sales excludes advancement payments.
The
Answer to Problem 63E
The entry for recoding the entry of sales and cash collection is made properly.
Explanation of Solution
The Citron Mechanical Systems sold on credit for
| Date | Particulars | Debit | Credit |
| Sale Revenue | |||
| (Sale on Credit with terms |
|||
| Cash | $6,82,680 | ||
| Sales Discount |
|||
| Accounts Receivable | |||
| (Cash collected from accounts receivable) |
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Chapter 5 Solutions
Cornerstones of Financial Accounting
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Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
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