(a)
Sales discounts:
The term
Gross method:
Under this method, the revenues are recorded at gross amount of sales i.e. without taking the effect of any discount at the time of sales.
The journal entries for Sims for recording the sales at gross.
Answer to Problem 88APSA
The journal entries for sales transactions at gross amount are recoded properly.
Explanation of Solution
The Sims provided two services. One at the amount of
The
| Date | Particulars | Debit ($) | Credit ($) |
(b)
Sales discounts:
The term
Gross method:
Under this method, the revenues are recorded at gross amount of sales i.e. without taking the effect of any discount at the time of sales.
The journal entry for the receiving payment within
Answer to Problem 88APSA
The
Explanation of Solution
The Sims provided two services. One at the amount of
The journal entry for Sims is as follows:
| Date | Particulars | Debit ($) | Credit ($) |
| Cash………………………………Sales discount……………………. Accounts Receivable………………(Record the receiving of revenue of service contact within the discount period of |
(c)
Sales discounts:
The term
Gross method:
Under this method, the revenues are recorded at gross amount of sales i.e. without taking the effect of any discount at the time of sales.
The journal entry for the receiving payment after
Answer to Problem 88APSA
The adjusting entry for recording the payment receivable of sales is recorded properly.
Explanation of Solution
The Sims provided two services. One at the amount of
The journal entry for Sims is as follows:
| Date | Particulars | Debit ($) | Credit ($) |
| Cash……………………………… Accounts Receivable………………(Record the receiving of revenue of service contact within the discount period of |
(d)
Sales discounts:
The term
To calculate:
The implied annual interest rate which the Lauber has to incur after failing to take benefit of sale discount.
Answer to Problem 88APSA
The implied annual interest rate is
Explanation of Solution
The Lauber did not pay the amount of
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Chapter 5 Solutions
Cornerstones of Financial Accounting - With CengageNow
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Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College