Question

Compute Net Sales for problems 1-3

1. Sold merchandise to Sam, who charged the $3,000 purchase on his Visa. Visa charges a 2% credit card fee

2. On July 15, sold merchandise to Marie at an invoice price of $9,000; terms 3/10, n/30. On July 23, company collected payment from Marie

3. On July 20, sold merchandise to Emily at an invoice price of $4,000; terms 3/10, n/30. On July 21, Emily returned a portion of the merchandise because it was defective, valued at 500. On August 20, company collected payment from Emily

Record bad debt expense and write off & Prepare journal entry for problems 4-6

1. On November 13 of the current year, an account receivable for $98,000 was determined uncollectable and written off   

2. At year end, the appropriate bad debt expense adjustment of $20,000 was recorded

3. On 12/1, $200 payment was received for an account previously written off. (hint 4 journal entries)

Answer 1

• All working forms part of the answer
• Requirement 1

Transaction no.	Accounts title	Debit	Credit	Working
$                    1.00	Cash	$          2,940.00		[3000 x 98%]
	Card Charges	$                60.00		[3000 x 2%]
	Sales Revenue		$   3,000.00	[3000 x 100%]
	(sales made)
2 [Jul 15]	Accounts receivables	$          9,000.00
	Sales Revenue		$   9,000.00
	(merchandise sold on account)
2 [Jul 23]	Cash	$          8,730.00		[9000 x 97%]
	Sales Discount	$             270.00		[9000 x 3%]
	Accounts receivables		$   9,000.00
	(cash collected within discount term of 10 days and discount given)
3 [Jul 20]	Accounts receivables	$          4,000.00
	Sales Revenue		$   4,000.00
	(merchandise sold on account)
3 [jul 21]	Sales Return	$             500.00
	Accounts receivables		$       500.00
	( merchandise returned)
3 [Aug 20]	Cash	$          3,500.00
	Accounts receivables		$   3,500.00
	(Cash collected after discount period of 10 days and no discount awarded)

----Answer-----

Sales revenue
1st Transaction	$            3,000.00
2 [Jul 15]	$            9,000.00
3 [Jul 20]	$            4,000.00
Total Sales		$    16,000.00
Sales Discount	2 [Jul 23]	$          270.00
Sales Return	3 [jul 21]	$          500.00
Net Sale		$    15,230.00

• Requirement 2

Transaction no.	Accounts title	Debit	Credit
1 [Nov 13]	Accounts receivables	$ 98,000.00
	Allowance for uncollectible account		$ 98,000.00
	(account written off)
2 [31 Dec]	Bad Debt Expense	$ 20,000.00
	Allowance for uncollectible account		$ 20,000.00
	(bad debt expense recorded)
3 [12/1]	Accounts receivables	$        200.00
	Allowance for uncollectible account		$        200.00
	(account reistated)
3 [12/1]	Cash	$        200.00
	Accounts receivables		$        200.00
	(cash collected from account that was written off)