Answer:
Accounts receivables 10,400 debit
Sales revenues 10,400 credit
Sales returns and allowance 200 debit
Accounts receivables 200 credit
cash 9,894 debit
sales discounts 306 debit
Accounts receivables 10,200 credit
accounts receivables 1,000 debit
sales revenues 1,000 credit
account receivables 18 debit
interest revenue 18 credit
Explanation:
we record the sales as usual, debit to accounts receivables and credit sales revenue.
The returned good decrease the value of the customer account hus, we decreased agsinst sales return and allowance.
We then, calculate the adjusted invoice balance and calcualte the discount:
balance: 10,400 invoice less 200 return = 10,200
discount granted as collection occur within first 10 days:
10,200 x 3% = 306
cash proceeds: 10,200 - 306 = 9,894
at the end of the month we calculate the interest of the 1,000 dollar credit sales:
interst on credit car sales:
1,000 x 1.8% = 18 dollar
