Question

On June 3, Riverbed Company sold to Chester Company merchandise having a sale price of $3,300 with terms of 2/10, n/60, f.o.b. shipping point. An invoice totaling $94, terms n/30, was received by Chester on June 8 from John Booth Transport Service for the freight cost. On June 12, the company received a check for the balance due from Chester Company.

(a)

Prepare journal entries on the Riverbed Company books to record all the events noted above under each of the following bases.

(1)		Sales and receivables are entered at gross selling price.
(2)		Sales and receivables are entered at net of cash discounts.

(If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No.	Date	Account Titles and Explanation	Debit	Credit
(1)	choose a transaction date                                                                      June 3June 12	enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount
	June 12	enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount
(2)	choose a transaction date                                                                      June 3June 12	enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount
	choose a transaction date                                                                      June 3June 12	enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount

Answer 1

Answer
Record on Gross Sales Basis
Date	Account Titles and Explanation	Debit	Credit
03-Jun	Accounts Receivable - Chester	$3,300
	Sales		$3,300
	(To record sales)
12-Jun	Cash	$3,234
	Sale Discounts	$66
	Accounts Receivable - Chester		$3,300
	(To record payment received)
Record on Net Sales Basis
Date	Account Titles and Explanation	Debit	Credit
03-Jun	Accounts Receivable - Chester	$        3,234
	Sales		$         3,234
	(To record sales)
12-Jun	Cash	$        3,234
	Accounts Receivable - Chester		$         3,234
	(To record payment received)
If payment received after expiry of discount period
29-Jun	Cash	$             66
	Accounts Receivable - Chester		$              66
	Sale Discount forfeited
	(To record payment received)