Question

Required information

Tracy Company, a manufacturer of air conditioners, sold 150 units to Thomas Company on November 17, 2018. The units have a list price of $760 each, but Thomas was given a 25% trade discount. The terms of the sale were 2/10, n/30.

3-a. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2018, assuming that the net method of accounting for cash discounts is used.

3-b. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on December 15, 2018, assuming that the net method of accounting for cash discounts is used.

Journal Entry Worksheet

1. Record the sale of 150 units with a list price of $760, a 25% trade discount (if applicable), with terms of 2/10, n/30 under the net method.

2. Record the cash collection on November 26.

Answer 1

Part 3a
Journal Entries
S.No.	Date	Account Name	Debit	Credit
1	17/11/2018	Accounts Receivable A/c	$        83,790
		To Sales		$        83,790
		( Being good sold after adjusting cash discount and on the terms of 2/10, n/30
2	26/11/2018	Cash/Bank A/c	$        83,790
		To Accounts Receivable		$        83,790
		(Being amount received on the term of 2/10, and the net method of accounting is used)
Part 3b
Journal Entries
S.No.	Date	Account Name	Debit	Credit
1	17/11/2018	Accounts Receivable A/c	$        83,790
		To Sales		$        83,790
		( Being good sold after adjusting cash discount and on the terms of 2/10, n/30
2	15/12/2018	Cash/Bank A/c	$        85,500
		To Accounts Receivable		$        83,790
		To Interest on sales		$          1,710
		(Being amount received on the term of n/30, and the net method of accounting is used)