Answer:
OPTION B
Cash debit for 19,000
Sales Discount debit for 1,000
Account receivable credit for 20,000
Explanation:
First, notice that this entry to record the payment of the invoice, so we are settlng this customer account, we are not recording the sale, that was done 10 days ago.
Same applies to the merchandise return, that was 2 days ago so we don't have to record that, only the cash payment from the customer.
The company sold merchandise for 24,000
Then the customer return 4,000
so the<em> total value of the account at payment date is 20,000</em>
Because<em> it is done within 10 days it will give a 5% discount </em>because the term are 5/15 (5% discount within the first 15 days) n/30 (nominal AKA no discount within 30 days)
So 20,000 sale x 5% discount = $1,000 discount
lastly, <em>nominal - discount = cash outflow</em>
$20,000 - $1,000 = $19,000
<u>Resuming:</u>
Cash debit for 19,000 (cash receive fro mthe customer)
Sales Discount debit for 1,000 (discount according to the sales term)
Account receivable credit for 20,000 (write-off the account)
