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nlexa [21]
3 years ago
12

Pierce Company sold to Stanton Company merchandise on account FOB shipping point, 2/10, net 30, for $20,000. Pierce prepaid the

$500 shipping charge. Which of the following entries does Pierce make to record this sale?
A. Accounts Receivable Stanton, debit $20,000; Sales, credit $20,000
B. Accounts Receivable Stanton, debit $19,600; Sales, credit $19,600, and Accounts Receivable Stanton, debit $500; Cash, credit $500
C. Accounts Receivable Stanton, debit $20,100; Sales, credit $20,100
D. Accounts ReceivableStanton, debit $20,000; Sales, credit $20,000, and Delivery Expense, debit $500; Cash, credit $500
Business
1 answer:
polet [3.4K]3 years ago
3 0

Answer:

D. Accounts ReceivableStanton, debit $20,000; Sales, credit $20,000, and Delivery Expense, debit $500; Cash, credit $500

Explanation:

The Sale transaction must be ;

Trade Receivable -  Stanton Company  $20,000 (debit)

Revenue $20,000 (credit)

<em>Recognise the Revenue and Asset -  Stanton Company</em>

Shipping Cost  $500 (debit)

Bank $500  (credit)

<em>Recognise the shipping cost and de-recognise the cash asset</em>

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Answer:

Inheritance

Explanation:

The above question highlights example of inheritance. Whenever the ownership of business is transferred from one generation to another, it can be taken as an example of inheritance in a capitalist system.

The same has happened in the above question as well. Chet Bowes who owned his own lanscapped business has now transferred the ownership to his son Josh who has recently taken charge, now it is very much clear from the question neither Josh built the company on his own now was hired on the basis of his capabilities, the transfer happened on the basis of his relationship with the owner of the company. The question shows an example of inheritance.

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Tater and Pepper Corp. reported free cash flows for 2018 of $58.1 million and investment in operating capital of $41.1 million.
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Answer:

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Data provided in the question:

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