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Gross and net methods for sales discounts The following were selected from among the transactions completed...
Gross and net methods for sales discounts
The following were selected from among the transactions completed by Strong Retail Group during August of the current year:
| Aug. | 5. | Sold merchandise on account to M. Quinn, $7,500, terms 2/10, n/30. The cost of the merchandise sold was $4,200. | |
| 9. | Sold merchandise on account to R. Busch., $4,000, terms 1/10, n/30. The cost of the merchandise sold was $2,100. | ||
| 15. | Received payment on account for the sale of August 5 less the discount. | ||
| 20. | Sold merchandise on account to S. Mooney, $6,000, terms n/eom. The cost of the merchandise sold was $3,300. | ||
| 25. | Received payment on account for the sale of August 9. | ||
| 31. | Received payment on account for the sale of August 20. |
a. Journalize the August transactions using the gross method of recording sales discounts. If an amount box does not require an entry, leave it blank.
| Aug. 5 | Accounts Receivable-M. Quinn | fill in the blank fcb0f5f4904103d_2 | fill in the blank fcb0f5f4904103d_3 |
| Sales | fill in the blank fcb0f5f4904103d_5 | fill in the blank fcb0f5f4904103d_6 | |
| Aug. 5 | Cost of Merchandise Sold | fill in the blank fcb0f5f4904103d_8 | fill in the blank fcb0f5f4904103d_9 |
| Merchandise Inventory | fill in the blank fcb0f5f4904103d_11 | fill in the blank fcb0f5f4904103d_12 | |
| Aug. 9 | Accounts Receivable-R. Busch | fill in the blank fcb0f5f4904103d_14 | fill in the blank fcb0f5f4904103d_15 |
| Sales | fill in the blank fcb0f5f4904103d_17 | fill in the blank fcb0f5f4904103d_18 | |
| Aug. 9 | Cost of Merchandise Sold | fill in the blank fcb0f5f4904103d_20 | fill in the blank fcb0f5f4904103d_21 |
| Merchandise Inventory | fill in the blank fcb0f5f4904103d_23 | fill in the blank fcb0f5f4904103d_24 | |
| Aug. 15 | Cash | fill in the blank fcb0f5f4904103d_26 | fill in the blank fcb0f5f4904103d_27 |
| Sales | fill in the blank fcb0f5f4904103d_29 | fill in the blank fcb0f5f4904103d_30 | |
| Accounts Receivable-M. Quinn | fill in the blank fcb0f5f4904103d_32 | fill in the blank fcb0f5f4904103d_33 | |
| Aug. 20 | Accounts Receivable-S. Mooney | fill in the blank fcb0f5f4904103d_35 | fill in the blank fcb0f5f4904103d_36 |
| Sales | fill in the blank fcb0f5f4904103d_38 | fill in the blank fcb0f5f4904103d_39 | |
| Aug. 20 | Cost of Merchandise Sold | fill in the blank fcb0f5f4904103d_41 | fill in the blank fcb0f5f4904103d_42 |
| Merchandise Inventory | fill in the blank fcb0f5f4904103d_44 | fill in the blank fcb0f5f4904103d_45 | |
| Aug. 25 | Cash | fill in the blank fcb0f5f4904103d_47 | fill in the blank fcb0f5f4904103d_48 |
| Accounts Receivable-R. Busch | fill in the blank fcb0f5f4904103d_50 | fill in the blank fcb0f5f4904103d_51 | |
| Aug. 31 | Cash | fill in the blank fcb0f5f4904103d_53 | fill in the blank fcb0f5f4904103d_54 |
| Accounts Receivable-S. Mooney | fill in the blank fcb0f5f4904103d_56 | fill in the blank fcb0f5f4904103d_57 |
Feedback
a. Consider accounts and amounts to be debited and credited using the gross method of recording sales discounts. Recall that any discounts taken reduce sales.
b. Journalize the August transactions using the net method of recording sales discounts. If an amount box does not require an entry, leave it blank.
| Aug. 5 | Accounts Receivable | fill in the blank 374ac403100e01a_2 | fill in the blank 374ac403100e01a_3 |
| Sales | fill in the blank 374ac403100e01a_5 | fill in the blank 374ac403100e01a_6 | |
| Aug. 5 | Cost of Merchandise Sold | fill in the blank 374ac403100e01a_8 | fill in the blank 374ac403100e01a_9 |
| Merchandise Inventory | fill in the blank 374ac403100e01a_11 | fill in the blank 374ac403100e01a_12 | |
| Aug. 9 | Accounts Receivable | fill in the blank 374ac403100e01a_14 | fill in the blank 374ac403100e01a_15 |
| Sales | fill in the blank 374ac403100e01a_17 | fill in the blank 374ac403100e01a_18 | |
| Aug. 9 | Cost of Merchandise Sold | fill in the blank 374ac403100e01a_20 | fill in the blank 374ac403100e01a_21 |
| Merchandise Inventory | fill in the blank 374ac403100e01a_23 | fill in the blank 374ac403100e01a_24 | |
| Aug. 15 | Cash | fill in the blank 374ac403100e01a_26 | fill in the blank 374ac403100e01a_27 |
| Accounts Receivable | fill in the blank 374ac403100e01a_29 | fill in the blank 374ac403100e01a_30 | |
| Aug. 20 | Accounts Receivable | fill in the blank 374ac403100e01a_32 | fill in the blank 374ac403100e01a_33 |
| Sales | fill in the blank 374ac403100e01a_35 | fill in the blank 374ac403100e01a_36 | |
| Aug. 20 | Cost of Merchandise Sold | fill in the blank 374ac403100e01a_38 | fill in the blank 374ac403100e01a_39 |
| Merchandise Inventory | fill in the blank 374ac403100e01a_41 | fill in the blank 374ac403100e01a_42 | |
| Aug. 25 | Cash | fill in the blank 374ac403100e01a_44 | fill in the blank 374ac403100e01a_45 |
| Accounts Receivable | fill in the blank 374ac403100e01a_47 | fill in the blank 374ac403100e01a_48 | |
| Sales | fill in the blank 374ac403100e01a_50 | fill in the blank 374ac403100e01a_51 | |
| Aug. 31 | Cash | fill in the blank 374ac403100e01a_53 | fill in the blank 374ac403100e01a_54 |
| Accounts Receivable | fill in the blank 374ac403100e01a_56 | fill in the blank 374ac403100e01a_57 |
Feedback
b. Consider the accounts and amounts to be debited and credited using the net method of recording sales discounts. Recall that any discounts not taken increase sales.
c. What is the total sales for August under each method?
| Total Sales | |
| Gross method | $fill in the blank d0acf4fddfd8fa3_1 |
| Net method | $fill in the blank d0acf4fddfd8fa3_2 |
d. Which method of recording sales discounts requires an end-of-period adjusting entry?
Gross method
Feedback
Partially correct
Solutions
Expert Solution
| Journal entries under Gross Method in the books of Strong Retail Group | ||||
| Date | Accounts & Explanation | Post ref | Debit | Credit |
| Aug-05 | Accounts Receivable-M.Quinn | $ 7,500 | ||
| Sales | $ 7,500 | |||
| (to goods sold on account recorded) | ||||
| Aug-05 | Cost of goods sold | $ 4,200 | ||
| Inventory | $ 4,200 | |||
| (to cost of goods sold recorded) | ||||
| Aug-09 | Accounts Receivable-R.Busch | $ 4,000 | ||
| Sales | $ 4,000 | |||
| (to goods sold on account recorded) | ||||
| Aug-09 | Cost of goods sold | $ 2,100 | ||
| Inventory | $ 2,100 | |||
| (to cost of goods sold recorded) | ||||
| Aug-15 | Cash[$7,500-($7,500*2%)] | $ 7,350 | ||
| Sales Discounts | $ 150 | |||
| Accounts Receivable-M.Quinn | $ 7,500 | |||
| (to payment received net of discount against goods sold on account) | ||||
| Aug-20 | Accounts Receivable-S.Mooney | $ 6,000 | ||
| Sales | $ 6,000 | |||
| (to goods sold on account recorded) | ||||
| Aug-20 | Cost of goods sold | $ 3,300 | ||
| Inventory | $ 3,300 | |||
| (to cost of goods sold recorded) | ||||
| Aug-25 | Cash | $ 4,000 | ||
| Accounts Receivable-R.Busch | $ 4,000 | |||
| (to payment received against goods sold on account) | ||||
| Aug-31 | Cash | $ 6,000 | ||
| Accounts Receivable-S.Mooney | $ 6,000 | |||
| Journal entries under Net Method in the books of Strong Retail Group | ||||
| Date | Accounts & Explanation | Post ref | Debit | Credit |
| Aug-05 | Accounts Receivable-M.Quinn[$7,500-($7,500*2%)] | $ 7,350 | ||
| Sales | $ 7,350 | |||
| (to goods sold on account recorded) | ||||
| Aug-05 | Cost of goods sold | $ 4,200 | ||
| Inventory | $ 4,200 | |||
| (to cost of goods sold recorded) | ||||
| Aug-09 | Accounts Receivable-R.Busch[$4,000-($4,000*1%)] | $ 3,960 | ||
| Sales | $ 3,960 | |||
| (to goods sold on account recorded) | ||||
| Aug-09 | Cost of goods sold | $ 2,100 | ||
| Inventory | $ 2,100 | |||
| (to cost of goods sold recorded) | ||||
| Aug-15 | Cash[$7,500-($7,500*2%)] | $ 7,350 | ||
| Accounts Receivable-M.Quinn | $ 7,350 | |||
| (to payment received against goods sold on account) | ||||
| Aug-20 | Accounts Receivable-S.Mooney | $ 6,000 | ||
| Sales | $ 6,000 | |||
| (to goods sold on account recorded) | ||||
| Aug-20 | Cost of goods sold | $ 3,300 | ||
| Inventory | $ 3,300 | |||
| (to cost of goods sold recorded) | ||||
| Aug-25 | Cash | $ 4,000 | ||
| Accounts Receivable-R.Busch | $ 3,960 | |||
| Sales Discount forefeited($4,000*1%) | $ 40 | |||
| (to payment received against goods sold on account and discount forefeited) | ||||
| Aug-31 | Cash | $ 6,000 | ||
Accounts
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Sales and Notes Receivable Transactions The following were selected from among the transactions completed during the...Sales and Notes Receivable Transactions
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wholesale company:
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Mar. 18.
Accepted a 60-day, 8% note for $32,700 from Black Tie Co. on
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