1. The amount of discount is determined by multiplying the invoice total (after any returns and...

1. The amount of discount is determined by multiplying the invoice total (after any returns and allowances and freight charges have been deducted) by the cash discount rate.

For the following purchases of merchandise, determine the amount of cash to be paid. If required, round your answers to the nearest cent.

Purchase	Invoice Date	Credit Terms	FOB	Amount of Purchase	Freight Charges	Total Invoice Amount	Returns and Allowances	Date Paid	Amount of cash to be paid
a.	7/7/13	2/10, n/30	Shipping point	$1,000	$50	$1,050	-	7/11/13	$
b.	7/10/13	n/30	Shipping point	$800	$30	$830	$40	7/31/13
c.	7/15/13	1/10, n/30	Destination	$650	-	$650	$50	7/20/13

2. When recording a cash receipt from a customer within the discount period, the business records a debit to Cash for the amount received, a debit to Sales Discounts for the amount of the discount, and a credit to Accounts Receivable for the full amount of the invoice less any returns and allowances.

Record the following sales transactions in general journal form on the books of Collins Company (the seller).

a.	Sold merchandise on account to Gallagher Company, invoice No. 1501, $2,000; terms 1/10, n/30.
b.	Issued credit memo No. 125 to Gallagher Company for damaged merchandise, $250.
c.	Gallagher Company paid the account in full within the discount period.

If an amount box does not require an entry, leave it blank. If required, round your answers to the nearest cent.

GENERAL JOURNAL				PAGE 1
	DESCRIPTION	POST. REF.	DEBIT	CREDIT
a.

	Sold merchandise to Gallagher Company , Inv. No. 1501

b.

	Issued credit memo No. 125

c.


	Received payment in full.

Expert Solution

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ekkarill92 answered 2 years ago

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