Question

Morgan Company uses the perpetual inventory system and the gross method of recording sales discounts. Morgan Company sold $60,000 of merchandise to Jameson Inc. on May 10, 20Y8, with credit terms of 2/10, n/30. The cost of the merchandise sold was 45,000. Assume Jameson pays within the discount period on May 19. When recording the journal entry to record the payment received, what amount is credited to Accounts Rece

Answer 1

Answer:

$60,000

Explanation:

Given that

Sale value of the merchandise = $60,000

Credit terms =  2/10, n/30

The cost of the merchandise sold = $45,000

So by considering the above information

The amount which is credited to account receivable is $60,000 as under the gross method the sale is recorded at the actual value of the inventory sold without considering the discount adjustment