Question

Presented below is information from Swifty Computers Incorporated. July 1 Sold $17,200 of computers to Robertson Company with terms 3/15, n/60. Swifty uses the gross method to record cash discounts. Swifty estimates allowances of $1,118 will be honored on these sales. 10 Swifty received payment from Robertson for the full amount owed from the July transactions. 17 Sold $172,000 in computers and peripherals to The Clark Store with terms of 2/10, n/30. 30 The Clark Store paid Swifty for its purchase of July 17.

Answer 1

Solution and Explanation:

The following journal entries are passed in the books of accounts:

date Particulars Post ref.                        Debit Credit  

1st july Accounts receivable                         17200  

Sales revenue                                            17200  

(To record sales revenue)    

1st July Sales return and allowances                 1118  

Allowance for sales return and allowance   1118  

(to record allowance for sales return)    

10th jluy Cash ( 17200 minus 516)   16684  

          Sales discount (17200 * 3%)  516  

Accounts receivable                                    17200  

(To record receipt and discount allowed)      

17 july Accounts receivable                    172000  

Sales revenue                                               172000  

30th july Cash                               172000  

Accounts receivable                                                         172000