Answer:
A.July 15
Dr Accounts receivable 50,000
Cr Sales revenue 50,000
July 23
Dr Cash 49,000
Dr Sales discounts 1,000
Cr Accounts receivable 50,000
B. July 15
Dr Accounts receivable50,000
Cr Sales revenue 50,000
Aug. 15
Dr Cash 50,000
Cr Accounts receivable 50,000
Explanation:
A.Preparation of journal entries to record the sale on July 15 and collection on July 23 using the gross method of accounting for cash discounts.
July 15
Dr Accounts receivable 50,000
Cr Sales revenue 50,000
(1,000 tires×$50 each)
July 23
Dr Cash 49,000
(50,000-1,000)
Dr Sales discounts 1,000
(2%×50,000)
Cr Accounts receivable 50,000
(1,000 tires×$50 each)
B.Preparation of journal entries to record the sale on July 15 and collection on August 15 using the gross method of accounting for cash discounts.
July 15
Dr Accounts receivable50,000
Cr Sales revenue 50,000
(1,000 tires×$50 each)
Aug. 15
Dr Cash50,000
Cr Accounts receivable50,000
(1,000 tires×$50 each)
