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Q2SE

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Horngren'S Financial And Managerial Accounting
Found in: Page 466

Short Answer

Recording credit sales and collections

Record the following transactions for Summer Consulting. Explanations are not required.

Apr. 15

Provided consulting services to Bob Jones and billed the customer $1,500.

18

Provided consulting services to Samantha Cruise and billed the customer $865.

25

Received $750 cash from Jones.

28

Provided consulting services to Regan Taylor and billed the customer $625.

28

Received $865 cash from Cruise.

30

Received $1,375 cash, $750 from Jones and $625 from Taylor

The transaction for which the payment is made after some time of billing is called credit sales.

See the step by step solution

Step by Step Solution

Step 1: Explanation of Collection Period

The term collection period refers to the period of time allowed by a seller to its customers to make the payment of the transaction

Step 2: Journalize the transactions for summer consulting

Date

Account and explanation

Debit

Credit

April 15

Accounts receivable – Bod Jones

Service Revenue

(Services performed on account)

$ 1,500

$ 1,500

April 18

Accounts receivable – Samantha Cruise

Service Revenue

(Services performed on account)

$ 865

$ 865

April 25

Cash

Accounts receivable – Bod Jones

(Collected cash on account)

$ 750

$750

April 28

Accounts receivable – Regan Taylor

Service Revenue

(Services performed on account)

$625

$625

April 28

Cash

Accounts receivable – Cruise

(Collected cash on account)

$865

$865

June 30

Cash

Accounts receivable – Regan Taylor

Accounts receivable – Cruise

(Collected cash on account)

$1,375

$1,375

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