Question

Record the following transactions on the books of Cullumber Co. Omit cost of goods sold entries. Record journal entries in the order presented in the problem.

1. On July 1, Cullumber Co. sold merchandise on account to Stacey Inc. for $20,820, terms 2/10, n/30.
2. On July 8, Stacey Inc. returned merchandise worth $2,520 to Cullumber Co.
3. On July 11, Stacey Inc. paid for the merchandise.

Answer 1

Answer -

Working Note -

Discount = 18,300 * 2 / 100

= 36,600 / 100

= $ 366

Here,

18,300 = 20,820(cost) - 2,520(return)

Discount is given because the payment is done within in the discount period which is 10 days.

Cullumber Co.

General Journal

Date	Particulars	Debit	Credit
July 1	Accounts Receivable	20,820
	Sales Revenue		20,820
	( Being goods sold)
July 8	Sales Returns	2,520
	Accounts Receivable		2,520
	(Being goods returned)
July11	Cash	17,934
	Sales Discount	366
	Accounts Receivable		18,300
	(Being cash received)