Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Question
Chapter 7, Problem 7.6E
(1)
To determine
Cash discount:
A cash discount is the reduction in the amount that is to be paid by the credit customers. It is usually allowed by the seller to buyer or customer, in order to motivate the customer to pay within a specified period of time. A cash discount is often referred as sales discount.
To prepare: The
(2)
To determine
To prepare: The journal entry to record the sales on July 15 and collection on August 15, 2018.
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Chapter 7 Solutions
Intermediate Accounting
Ch. 7 - Prob. 7.1QCh. 7 - Prob. 7.2QCh. 7 - Prob. 7.3QCh. 7 - Prob. 7.4QCh. 7 - Prob. 7.5QCh. 7 - Prob. 7.6QCh. 7 - Distinguish between the gross and net methods of...Ch. 7 - Briefly explain the accounting treatment for sales...Ch. 7 - Explain the typical way companies account for...Ch. 7 - Briefly explain the difference between the income...
Ch. 7 - Prob. 7.11QCh. 7 - Is any special accounting treatment required for...Ch. 7 - Explain any possible differences between...Ch. 7 - Prob. 7.14QCh. 7 - What is meant by the discounting of a note...Ch. 7 - What are the key variables that influence a...Ch. 7 - Explain how the CECL model (introduced in ASU No....Ch. 7 - Prob. 7.18QCh. 7 - Prob. 7.19QCh. 7 - (Based on Appendix 7B) Marshall Companies, Inc.,...Ch. 7 - Prob. 7.21QCh. 7 - Prob. 7.1BECh. 7 - Prob. 7.2BECh. 7 - Prob. 7.3BECh. 7 - Cash discounts; gross method LO73 On December 28,...Ch. 7 - Prob. 7.5BECh. 7 - Sales re turns LO74 During 2018, its first year...Ch. 7 - Sales re turns LO74 Refer to the situation...Ch. 7 - Prob. 7.8BECh. 7 - Prob. 7.9BECh. 7 - Uncollectible accounts; balance sheet approach ...Ch. 7 - Uncollectible accounts; solving for unknown LO75,...Ch. 7 - Prob. 7.12BECh. 7 - Note receivable LO77 On December 1, 2018,...Ch. 7 - Long-term notes receivable LO74 On April 19,...Ch. 7 - Prob. 7.15BECh. 7 - Factoring of accounts receivable LO78 Refer to...Ch. 7 - Prob. 7.17BECh. 7 - Discounting a note LO78 On March 31, Dower...Ch. 7 - Receivables turnover LO78 Camden Hardwares credit...Ch. 7 - Prob. 7.20BECh. 7 - Prob. 7.21BECh. 7 - Impairments of Accounts Receivable Appendix 7B...Ch. 7 - Credit Losses on Accounts Receivable (CECL Model) ...Ch. 7 - Prob. 7.1ECh. 7 - Prob. 7.2ECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Trade and cash discounts; the gross method and the...Ch. 7 - Prob. 7.6ECh. 7 - Cash discounts; the net method LO73 [This is a...Ch. 7 - Sales returns LO74 Halifax Manufacturing allows...Ch. 7 - Prob. 7.9ECh. 7 - Prob. 7.10ECh. 7 - Uncollectible accounts; allowance method; balance...Ch. 7 - Uncollectible accounts; allowance method and...Ch. 7 - Uncollectible accounts; allowance method; solving...Ch. 7 - Note receivable LO77 On June 30, 2018, the...Ch. 7 - Noninterest-bearing note receivable LO77 [This is...Ch. 7 - Long-term notes receivable LO77 On January 1,...Ch. 7 - Prob. 7.17ECh. 7 - Prob. 7.18ECh. 7 - Prob. 7.19ECh. 7 - Factoring of accounts receivable with recourse ...Ch. 7 - Factoring of accounts receivable with recourse...Ch. 7 - Discounting a note receivable LO78 Selkirk...Ch. 7 - Concepts; terminology LO71 through LO78 Listed...Ch. 7 - Receivables; transaction analysis LO73, LO75...Ch. 7 - Prob. 7.25ECh. 7 - Prob. 7.26ECh. 7 - Prob. 7.27ECh. 7 - Prob. 7.28ECh. 7 - Prob. 7.29ECh. 7 - Prob. 7.30ECh. 7 - Impairments of Notes Receivable Appendix 7B At...Ch. 7 - Prob. 7.32ECh. 7 - Prob. 7.33ECh. 7 - Prob. 7.34ECh. 7 - Uncollectible accounts; allowance method; income...Ch. 7 - Uncollectible accounts; Amdahl LO75 Real World...Ch. 7 - Bad debts; Nike, Inc. LO75 Real World Financials...Ch. 7 - Uncollectible accounts LO75, LO76 Raintree...Ch. 7 - Prob. 7.5PCh. 7 - Notes receivable; solving for unknowns LO77...Ch. 7 - Prob. 7.7PCh. 7 - Prob. 7.8PCh. 7 - Prob. 7.9PCh. 7 - Prob. 7.10PCh. 7 - Prob. 7.11PCh. 7 - Accounts and notes receivable; discounting a note...Ch. 7 - Prob. 7.13PCh. 7 - Prob. 7.14PCh. 7 - Prob. 7.15PCh. 7 - Prob. 7.16PCh. 7 - Prob. 7.17PCh. 7 - Prob. 7.1BYPCh. 7 - Prob. 7.2BYPCh. 7 - Prob. 7.3BYPCh. 7 - Real World Case 74 Sales returns; Green Mountain...Ch. 7 - Ethics Case 75 Uncollectible accounts LO75 You...Ch. 7 - Prob. 7.6BYPCh. 7 - Prob. 7.7BYPCh. 7 - Prob. 7.8BYPCh. 7 - Prob. 7.9BYPCh. 7 - Prob. 7.10BYPCh. 7 - Prob. 7.11BYPCh. 7 - Prob. 1CCTC
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Similar questions
- A retailer pays on credit for $650 worth of inventory, terms 3/10, n/40. If the merchandiser pays within the discount window, how much will the retailer remit in cash to the manufacturer? A. $19.50 B. $630.50 C. $650 D. $195arrow_forward( Appendix 5A) Sales Discounts Ramsden Inc. provided consulting services with a gross price of $25,000 and terms of 2/10, n/30. Required: 1. Prepare the necessary journal entries to record the sale under the gross method. 2. Prepare the necessary journal entries to record collection of the receivable, assuming the customer pays within 10 days. 3. Prepare the necessary journal entries to record collection of the receivable, assuming the customer pays after 10 days.arrow_forwardExercise 6.10 (Algo) Cash Discounts (LO6-6) Golf World sold merchandise to Mulligans for $93,000, offering terms of 1/15, n/30. Mulligans paid for the merchandise within the discount period. Both companies use perpetual inventory systems. a. Prepare journal entries in the accounting records of Golf World to account for this sale and the subsequent collection. Assume the original cost of the merchandise to Golf World had been $60,450. b. Prepare journal entries in the accounting records of Mulligans to account for the purchase and subsequent payment. Mulligans records purchases of merchandise at net cost. c. Assume that, because of a change in personnel, Mulligans failed to pay for this merchandise within the discount period. Prepare the journal entry in the accounting records of Mulligans to record payment after the discount period.arrow_forward
- 17 A company purchased $4,600 worth of merchandise. Transportation costs were an additional $405. The company returned $315 worth of merchandise and then paid the invoice within the 1% cash discount period. The total cost of this merchandise is: 1 Multiple Choice polnts $4,510.00. $4.476.00. $4,644.00. $4,647.15. $4,690.00.arrow_forward20 A company purchased $3,500 of merchandise on July 5 with terms 1/10, n30. On July 7, it returned $700 worth of merchandise. On July 8, it paid the full amount due. The amount of the cash paid on July 8 equals 2004358 Multiple Choice O O O $2,800 $700 1337) Help Save & Exit $1000 Submitarrow_forwardQuestion 5 a. Cash discounts will normally appear on an invoice in terms such as 2/10 n30. What does this mean for an invoice of value GH¢10,000? b. Extracts from the profit and loss account for the year and the balance sheet as at the end of the year for NORA Enterprise are shown below. Assume all sales and purchases are on credit terms. Item Sales Amount GH¢ 200,000 Cost of goods sold 150,000 Purchases 120,000 Accounts Receivable 35,500 Accounts Payable 18,000 Inventory Finished goods 15,000 Work in progress 28,000 37,000 Raw materials i. Calculate the overall inventory turnover period and ratio. ii. Calculate the accounts receivable turnover period and ratio. iii. Compute the accounts payable turn over period and ratio. iv. What do the values computed in (a), (b) and (c) mean? v. What is the length of the operating cycle and the cash conversion cycle?arrow_forward
- Nonearrow_forwardsh16 Abbey Co. sold merchandise to Gomez Co. on account, $34,000, terms 2/15, n/45. The cost of the goods sold was $14,693. Abbey Co. issued a credit memo for $4,100 for merchandise returned that originally cost $1,189. What is the amount of gross profit earned by Abbey Co. on these transactions? a.$13,504 b.$19,816 c.$16,396 d.$4,100arrow_forward3arrow_forward
- [This is a variation of E 7–6 modified to focus on the net method of accounting for cash discounts.]Harwell Company manufactures automobile tires. On July 15, 2018, the company sold 1,000 tires to the NixonCar Company for $50 each. The terms of the sale were 2/10, n/30. Harwell uses the net method of accounting forcash discounts.Required:1. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and payment on July 23, 2018.2. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and payment on August 15,2018.arrow_forwardProvide correct calculationarrow_forward$0 ric 200 The following summarizes Tesla's merchandising activities for the year. Set up T-accounts for Merchan- dise Inventory and for Cost of Goods Sold. Enter each line item into one or both of the two T-accounts and compute the T-account balances. Cost of merchandise sold to customers.. Merchandise inventory, beginning-of-year.... Merchandise purchases, gross amount Shrinkage on inventory as of year-end.... Transportation-in for merchandise purchases. Cost of merchandise returned by customers (and restored to inventory). Discounts received from suppliers on merchandise purchases Returns to and allowances from suppliers on merchandise purchases $196,000 25,000 192,500 800 2,900 2,100 1,700 4,000 Exercise 5-11 Inventory and cost of sales transactions in T-accounts P1 P2 Check Ending Merch. Inventory, $20,000arrow_forward
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