Question

In: Accounting

Harwell Company manufactures automobile tires. On July 15, 2021, the company sold 1,500 tires to the...

Harwell Company manufactures automobile tires. On July 15, 2021, the company sold 1,500 tires to the Nixon Car Company for $60 each. The terms of the sale were 3/20, n/30. Harwell uses the gross method of accounting for cash discounts.

Required:

1. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and collection on July 23, 2021.
2. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and collection on August 15, 2021.

Solutions

Expert Solution

Requirement 1:

Date

Account Title & Explanation

Debit

Credit

July 15,2021

Account Receivable – Nixon Car

$90000

  Sales Revenue

$90000

(To record of tire sold ,1500 @ $60)

July 23,2021

Cash Account

$87300

Discount ($90000 x 3%)

$2700

       Account Receivable – Nixon Car

$90000

(To record of Payment received with in discount period)

Requirement 2:

Date

Account Title & Explanation

Debit

Credit

July 15,2021

Account Receivable – Nixon Car

$90000

  Sales Revenue

$90000

(To record of tire sold ,1500 @ $60)

Aug 15,2021

Cash Account

$90000

       Account Receivable – Nixon Car

$90000

(To record of Payment received after discount period)


Related Solutions

Harwell Company manufactures automobile tires. On July 15, 2018, the company sold 2,700 tires to the...
Harwell Company manufactures automobile tires. On July 15, 2018, the company sold 2,700 tires to the Nixon Car Company for $80 each. The terms of the sale were 3/10, n/30. Harwell uses the net method of accounting for cash discounts. Required: 1. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and payment on July 23, 2018. 2. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and...
Harwell Company manufactures automobile tires. On July 15, 2018, the company sold 1,400 tires to the...
Harwell Company manufactures automobile tires. On July 15, 2018, the company sold 1,400 tires to the Nixon Car Company for $40 each. The terms of the sale were 3/10, n/30. Harwell uses the gross method of accounting for cash discounts. Required: 1. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and collection on July 23, 2018. 2. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and...
On July 15, 2021, the Nixon Car Company purchased 1,500 tires from the Harwell Company for...
On July 15, 2021, the Nixon Car Company purchased 1,500 tires from the Harwell Company for $46 each. The terms of the sale were 3/10, n/30. Nixon uses a perpetual inventory system and the gross method of accounting for purchase discounts. Required: 1. Prepare the journal entries to record the purchase on July 15 and payment on July 23, 2021. 2. Prepare the journal entry for the payment, assuming instead that it was made on August 15, 2021.
On July 15, 2018, the Nixon Car Company purchased 3,000 tires from the Harwell Company for...
On July 15, 2018, the Nixon Car Company purchased 3,000 tires from the Harwell Company for $30 each. The terms of the sale were 2/10, n/30. Nixon uses a periodic inventory system and the net method of accounting for purchase discounts. Required: 1. Prepare the journal entries to record the purchase on July 15 and payment on July 23, 2018. 2. Prepare the journal entry to record the payment on August 15, 2018. 3. If Nixon instead uses a perpetual...
On July 15, 2018, the Nixon Car Company purchased 2,300 tires from the Harwell Company for $35 each. The terms of the sa...
On July 15, 2018, the Nixon Car Company purchased 2,300 tires from the Harwell Company for $35 each. The terms of the sale were 4/10, n/30. Nixon uses a periodic inventory system and the net method of accounting for purchase discounts. Required: 1. Prepare the journal entries to record the purchase on July 15 and payment on July 23, 2018. 2. Prepare the journal entry to record the payment on August 15, 2018. 3. If Nixon instead uses a perpetual...
On July 2, 2021, Blossom Company sold to Sue Black merchandise having a sales price of...
On July 2, 2021, Blossom Company sold to Sue Black merchandise having a sales price of $9,600 (cost $5,760) with terms of 2/10. n/30. f.o.b. shipping point. Blossom estimates that merchandise with a sales value of $810 will be returned. An invoice totaling $100, terms n/30, was received by Black on July 6 from Pacific Delivery Service for the freight cost. Upon receipt of the goods, on July 3, Black notified Blossom that $350 of merchandise contained flaws. The same...
On July 2, 2021, Concord Company sold to Sue Black merchandise having a sales price of...
On July 2, 2021, Concord Company sold to Sue Black merchandise having a sales price of $10,800 (cost $6,480) with terms of 2/10. n/30. f.o.b. shipping point. Concord estimates that merchandise with a sales value of $630 will be returned. An invoice totaling $110, terms n/30, was received by Black on July 6 from Pacific Delivery Service for the freight cost. Upon receipt of the goods, on July 3, Black notified Concord that $350 of merchandise contained flaws. The same...
XYZ Company manufactures a variety of highly technical automobile parts, which are sold at home and...
XYZ Company manufactures a variety of highly technical automobile parts, which are sold at home and in five foreign countries. The company is large and growing rapidly. Which is the structure for this company? a. Cross-sectional structure b. Functional structure c. Divisional structure d. Matrix structure e. Project structure
A company manufacturing bicycles has a current annual demand of 1,500 bikes. In buying bike tires,...
A company manufacturing bicycles has a current annual demand of 1,500 bikes. In buying bike tires, they pay $14 per tire with an estimated carrying cost of 20% of the tire’s cost. Each order cost $25 to process. Orders are placed on the first of each month for an equal amount every month. Determine the current ordering cost, carrying cost and total inventory cost each year using the current order quantity. Calculate the EOQ. Determine the current ordering cost, carrying...
On July 15, 2021, Ortiz & Co. signed a contract to provide EverFresh Bakery with an...
On July 15, 2021, Ortiz & Co. signed a contract to provide EverFresh Bakery with an ingredient-weighing system for a price of $82,800. The system included finely tuned scales that fit into EverFresh's automated assembly line, Ortiz's proprietary software modified to allow the weighing system to function in EverFresh's automated system, and a one-year contract to calibrate the equipment and software on an as-needed basis. (Ortiz competes with other vendors who offer ongoing calibration contracts for Ortiz's systems.) If Ortiz...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT