Question

Exercise 5-64 Sales and Sales Returns and Allowances Rubin Enterprises had the following sales-related transactions on a recent day: Billed customer $27,500 on account for services already provided. Collected $5,875 in cash for services to be provided in the future. The customer complained about aspects of the services provided in Transaction a. To maintain a good relationship with this customer, Rubin granted an allowance of $1,500 off the list price. The customer had not yet paid for the services. Rubin provided the services for the customer in Transaction b. Additionally, Rubin granted an allowance of $350 because the services were provided after the promised date. Because the customer had already paid, Rubin paid the $350 allowance in cash. Required: Prepare the necessary journal entry (or entries) for each of these transactions.

Answer 1

Answer:

                                             Rubin Enterprises

                                                General journal

1. Dr  Account receivable  27500

             Cr Sales revenue         27500

    (To record sales )

2. Dr Cash   5870

         Cr Account receivable   5870

   (To record collection against receivable)

3. Dr Sales discount   1500

          Cr  Account receivable   1500

   (To record sales discount)

4. Dr Sales return and allowances 350

              Cr Cash                                       350

   (To record allowance )