Question

Big Country Ski Shop is a retail store that sells ski equipment and clothing. Big Country Ski Shop commenced business on September 1, 2019. The firm purchases merchandise on open account. The firm’s purchases, purchase returns and allowances, and cash payments on account during September 2019 follow:

DATE		TRANSACTIONS
2019
Sept.	2	Purchased ski boots for $5,000 plus a freight charge of $150 from Colorado Ski Shop, Invoice 6672, terms n/30.
	3	Purchased skis for $10,600 from Alaska Supply Company, Invoice 5916; terms 3/10, n/30.
	7	Received Credit Memorandum 165 for $840 from Colorado Ski Shop for return of damaged ski boots; the boots were originally purchased September 2 on Invoice 6672.
	11	Purchased ski jackets for $3,400 from Cold Mountain Clothing Company, Invoice 4091, terms n/30.
	12	Issued Check 104 to Alaska Supply Company in payment of Invoice 5916, dated September 3, less the cash discount.
	22	Purchased ski poles for $3,160 plus a freight charge of $200 from Alaska Supply Company, Invoice 5950, terms 3/10, n/30.
	23	Purchased ski pants for $1,650 from Swenson Ski Goods, Invoice 528, terms n/30.
	25	Received Credit Memorandum 245 for $240 from Swenson Ski Goods for return of defective ski pants; the pants were originally purchased September 23 on Invoice 528.
	27	Purchased ski sweaters for $4,200 plus a freight charge of $180 from Colorado Ski Shop, Invoice 6722, terms n/30.
	30	Issued Check 110 to Colorado Ski Shop in payment of Invoice 6672, dated September 2, less the return of September 7.

Required:
Record the transactions in a general journal.

Analyze:
What was the amount of the cash discount on September 12?

Answer 1

	Date	Account Titles and Explanation			Debit	Credit
	Sept 2.	Purchase account			5150
		Colorado ski shop				5150
		(Purchased ski boots on credit)
	Sept 3.	Purchase account			10600
		Alaska supply company				10600
		(Purchased ski boots on credit)
	Sept 7.	Colorado ski shop			840
		Purchase returns and allowances				840
		(Received Credit Memorandum)
	Sept 11.	Purchase account
		Cold Mountain Clothing Company
		(Purchased ski jackets on credit)
	Sept 12.	Alaska supply company			10600
		Cash				10282
		Discount received		(10600*3%)		318
		(Issued Check 104 to Alaska Supply Company)
	Sept 22.	Purchase account			3360
		Alaska supply company				3360
		(Purchased ski poles on credit)
	Sept 23.	Purchase account			1650
		Swenson Ski Goods				1650
		(Purchased ski pants on credit)
	Sept 25.	Swenson Ski Goods			240
		Purchase returns and allowances				240
		(Received Credit Memorandum)
	Sept 27.	Purchase account			4380
		Colorado ski shop				4380
		(Purchased ski sweaters on credit)
	Sept 30.	Colorado ski shop			4310
		Cash				4310
		(Issued Check 110 to Colorado Ski Shop)
	Analyze :
	Terms are 3/10,n/30 which means that if you pay within 10 days,3% discount can be availed
	Discount=10600*3%=$318