Answer:
a. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2021, assuming that the gross method of accounting for cash discounts is used.
November 17, 100 units sold to Thomas Company, terms 2/10, n/30
Dr Accounts receivable 42,000
Cr Sales revenue 42,000
November 26, invoice collected from Thomas Company
Dr Cash 41,160
Dr Sales discounts 840
Cr Accounts receivable 42,000
b. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on December 15, 2021, assuming that the gross method of accounting for cash discounts is used.
November 17, 100 units sold to Thomas Company, terms 2/10, n/30
Dr Accounts receivable 42,000
Cr Sales revenue 42,000
December 15, invoice collected from Thomas Company
Dr Cash 42,000
Cr Accounts receivable 42,000
c. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2016, assuming that the net method of accounting for cash discounts is used.
November 17, 100 units sold to Thomas Company, terms 2/10, n/30
Dr Accounts receivable 41,160
Cr Sales revenue 41,160
November 26, invoice collected from Thomas Company
Dr Cash 41,160
Cr Accounts receivable 41,160
