Answer:
1. $686,000
2. $681,460
3. 679,140
Explanation:
Customers paid $454,000 (list price) of these sales within the discount period which implies that they qualified for 1% discount and cash received was 0.99 x 454,000 = $449,460
and the remaining $232,000 (list price) after the discount period. which implies that the full amount of these sales were received in cash.
1. The amount of sales Citron recorded in 2019 is the total amount of $686,000 since Citron uses the gross method of recording sales.
2. The amount of cash that Citron collected from these sales is 0.99 x 454,000 = $449,460 + $232,000 = $681,460
3. Assuming the net method was used for all sales, prepare a summary journal entry to record these sales
Net method assumes that all customers will qualify for discount which is 0.99 x 686,000 = 679,140
Dr. Account Receivable....679,140
Cr. Sales............................................679,140
and a second summary entry to record the cash collected.
Dr. Cash.....................679,140
Cr. Account Receivable.......679,140
