Question

Perez Computers Incorporated grants its customers cash discounts of 3/10, n/60. Perez had the following transactions during the month of July.

July 1	Sold $20,000 of computers to Robertson Company.
10	Perez received payment from Robertson for July 1st sale.
17	Sold $200,000 in computers and peripherals to The Clark Store.
30	The Clark Store paid Perez for its July 17 purchase.

Instructions: Journalize these transactions for the seller using the gross method of accounting for sales.

Instructions: Journalize these transactions for Perez Computers Incorporated using the net method of accounting for sales.

Answer 1

Requirement:

Under Gross method:

July.01	Accounts receivable-Robertson company	$   20,000
	Sales revenue		$   20,000
	( To record sales revenue on account)
July.10	Cash [20000*(100%-3%)]	$   19,400
	sales discount [20000*3%]	$        600
	Accounts receivable-Robertson company		$   20,000
	( To record recognition of accounts receivable at discount)
July.17	Accounts receivable-Clark store	$ 200,000
	Sales revenue		$ 200,000
	( To record sales revenue on account)
July.30	Cash	$ 200,000
	Accounts receivable-Clark store		$ 200,000
	( To record recognition of accounts receivable)

Under net method:

July.01	Accounts receivable-Robertson company [20000*(100%-3%)]	$   19,400
	Sales revenue		$   19,400
	( To record sales revenue on account)
July.30	Cash	$   19,400
	Accounts receivable-Clark store		$   19,400
	( To record recognition of accounts receivable)
July.17	Accounts receivable-Clark store [200000*(100%-3%)]	$ 194,000
	Sales revenue		$ 194,000
	( To record sales revenue on account)
July.30	Cash	$ 200,000
	Sales Discount [200000*3%]		$     6,000
	Accounts receivable-Clark store		$ 194,000
	( To record recognition of sale at discount cancelled)