Question

In: Accounting

On June 14, 2013, Rumsfeld Company sold 100 units of material to Powell Heating and Cooling on account.

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.

Solutions

Expert Solution








DATEACCOUNT TITLESDEBITCREDIT

June,14,2013Accounts Receivable(900000+90000)   990,000



Sales(12000*100*(1-0.25))
         900,000


VAT Output(900000*10%)
           90,000







June,25Cash   990,000



Accounts Receivable
         990,000













b




June,14,2013Accounts Receivable   990,000



Sales
         900,000


VAT Output
           90,000







June,25Cash   980,100



Discount granted(900000*1%)        9,000



VAT input(9000*10%)           900



Accounts Receivable
         990,000








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