In: Accounting
On June 14, 2013, Rumsfeld Company sold 100 units of material to Powell Heating and Cooling on account. The units list for 12.000.000 (excluding 10% VAT). On June 15, Powell was granted a 25% discount on total amount of the invoice due to some defects in the material. On June 25, Powell had tranferred money to fully pay (net amount) for the goods. Required: a/ Prepare the journal entry to record the sale. b/ Given the fact that Rumsfeld Company offers 1% discount for all of payment made within 15 day from shipping, prepare the journal entry to record the sale and the payment.
DATE | ACCOUNT TITLES | DEBIT | CREDIT | ||
June,14,2013 | Accounts Receivable(900000+90000) | 990,000 | |||
Sales(12000*100*(1-0.25)) | 900,000 | ||||
VAT Output(900000*10%) | 90,000 | ||||
June,25 | Cash | 990,000 | |||
Accounts Receivable | 990,000 | ||||
b | |||||
June,14,2013 | Accounts Receivable | 990,000 | |||
Sales | 900,000 | ||||
VAT Output | 90,000 | ||||
June,25 | Cash | 980,100 | |||
Discount granted(900000*1%) | 9,000 | ||||
VAT input(9000*10%) | 900 | ||||
Accounts Receivable | 990,000 | ||||