Explanation a. Record the journal entry for the sale of inventory on account. Date Accounts and Explanation Debit ($) Credit ($) Accounts Receivable 71,050 (1) To Sales 71,050 (To record the sale of inventory on account after discount) Table (1) Working Note: Calculate the amount of accounts receivable. Sales = $72,500 Discount Percentage = 2% Amount of accounts receivable } = Sales − Discount = Sales − ( Sales × 2 % ) = $72,500 – ( $ 72 , 500 × 2 % ) = $72,500 − $ 1 , 450 = $ 71 , 050 (1) Accounts Receivable is an asset and it is increased by $71,050. Therefore, debit account receivable with $71,050

Bundle: Accounting, Loose-Leaf Version, 26th + LMS Integrated for CengageNOW, 2 terms Printed Access Card

26th Edition

ISBN: 9781305715967

Author: Carl Warren, Jim Reeve, Jonathan Duchac

Publisher: Cengage Learning

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Chapter 6, Problem 6.3APE

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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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Chapter 6, Problem 6.2BPE

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Bundle: Accounting, Loose-Leaf Version, 26th + LMS Integrated for CengageNOW, 2 terms Printed Access Card

Ch. 6 - What distinguishes a merchandising business from a...Ch. 6 - Can a business earn a gross profit but incur a net...Ch. 6 - The credit period during which the buyer of...Ch. 6 - Prob. 4DQ Ch. 6 - Prob. 5DQ Ch. 6 - Prob. 6DQ Ch. 6 - Who bears the freight when the terms of sale are...Ch. 6 - Name four accounts that would normally appear in...Ch. 6 - Audio Outfitter Inc., which uses a perpetual...Ch. 6 - Assume that Audio Outfitter Inc. in Discussion...

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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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