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Horngren'S Financial And Managerial Accounting
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Short Answer

Journalize the following sales transactions for Sierra Tractors. Explanations are not required.

June 5 Sierra sold $20,000 of inventory on account, credit terms are 4/10, n/30. Cost of goods is $10,000. Sierra uses the gross method to record sales revenue.

12 Sierra receives payment from the customer on the amount due, less the discount.

The total of debits and credits is $50,000.

See the step by step solution

Step by Step Solution

Step 1: Meaning of Discount

In accounting, a discount denotes the reduction in the price of the goods or services purchased or sold by a business concern. Discount is bifurcated into two categories for identifying the revenue or expense, i.e., sales discount and purchase discount.

Step 2: Preparation of journal entries

Date

Accounts and Explanation

Debit ($)

Credit ($)

Jun 5

Accounts receivable

20,000

Sales revenue

20,000

Jun 5

Cost of goods sold

10,000

Merchandise inventory

10,000

Jun 12

Cash

19,200

Sales discount (20000*4%)

800

Accounts receivable

20,000

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Journalize the following transactions that occurred in January 2018 for Sylvia’s Amusements. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name. Sylvia estimates sales returns at the end of each month.

Jan. 4 Purchased merchandise inventory on account from Vanderbilt Company, $7,000. Terms 1/10, n/EOM, FOB shipping point.

6 Paid freight bill of $100 on January 4 purchase.

8 Returned half the inventory purchased on January 4 from Vanderbilt Company.

10 Sold merchandise inventory for cash, $1,600. Cost of goods, $640. FOB destination.

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12 Paid freight bill of $60 on January 10 sale.

13 Sold merchandise inventory to Cabbell Company, $9,500, on account, terms of n/45. Cost of goods, $5,225. FOB shipping point.

14 Paid the amount owed on account from January 4, less return and discount.

17 Received defective inventory as a sales return from the January 13 sale, $600. Cost of goods, $300.

18 Purchased inventory of $4,600 on account from Roberts Corporation. Payment terms were 3/10, n/30, FOB destination.

20 Received cash from Graceland Corporation, less discount.

26 Paid amount owed on account from January 18, less discount.

28 Received cash from Cabbell Company, less return.

29 Purchased inventory from Sandra Corporation for cash, $11,600, FOB shipping point. Freight in paid to shipping company, $240.

Journalize the following transactions that occurred in November 2018 for Julie’s Fun World. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name. Julie’s Fun World estimates sales returns at the end of each month.

Nov. 4 Purchased merchandise inventory on account from Vera Company, $5,000. Terms 3/10, n/EOM, FOB shipping point.

6 Paid freight bill of $100 on November 4 purchase

8 Returned half the inventory purchased on November 4 from Vera Company.

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11 Sold merchandise inventory to Geary Corporation, $11,100, on account, terms of 2/10, n/EOM. Cost of goods, $6,105. FOB shipping point.

12 Paid freight bill of $20 on November 10 sale.

13 Sold merchandise inventory to Caldwell Company, $9,500, on account, terms of n/45. Cost of goods, $5,225. FOB shipping point.

14 Paid the amount owed on account from November 4, less return and discount.

17 Received defective inventory as a sales return from the November 13 sale, $500. Cost of goods, $275.

18 Purchased inventory of $3,600 on account from Rainman Corporation. Payment terms were 2/10, n/30, FOB destination.

20 Received cash from Geary Corporation, less discount.

26 Paid amount owed on account from November 18, less discount.

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29 Purchased inventory from Sandra Corporation for cash, $12,300, FOB shipping point. Freight in paid to shipping company, $170.

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