Answer:
Jan 7
Dr Cost of Good Sold 7,860
Cr Inventory 7,860
(to record the cost of good sold)
Dr Account Receivable 13,100
Cr Revenue 13,100
( to record revenue and receivable owed from Stewart)
Jan 13
Dr Sales Returns 2,620
Cr Account Receivable 2,620
(to record sales return from Stewart)
Dr Inventory 2,620
Cr Cost of good sold 2,620
(to record inventory returns and decrease in cost of good sold due to sales return from Stewart)
Jan 18
Dr Cash 10,480
Cr Account Receivable 10,480
( to record full collection from Stewart after 11 days)
* further working note on Jan 18 transaction: As Stewart had return $2,620 sales; the Receivable from Stewart is just $10,480 ( 13,100 - 2,620). Also, the term of receivable is 5/10, n/30; the repayment after 10 days received from Steward is not eligible for discount.
Explanation:
