Question

On September 12, Vander Company, Inc. sold merchandise in the amount of $5,800 to Jepson Company on credit with terms of 2/10, n/30. The cost of the items sold is $4,000. Vander uses the gross method of accounting for sales and a periodic inventory system. On September 14, Jepson returns some of the merchandise. The selling price of the merchandise is $500 and the cost of the merchandise returned is $350. Jepson pays the invoice on September 18 and takes the appropriate discount. The journal entry that Vander makes on September 18 is:_________.
A) Cash 5,684
Sales discounts 116
Accounts receivable 5,800
B) Cash 5,800
Accounts receivable 5,800
C) Cash 4,000
Accounts receivable 4,000
D) Cash 5,684
Accounts receivable 5,684
E) Cash 5,194
Sales discounts 106
Accounts receivable 5,300

Answer 1

Answer:

E). Cash 5,194

Sales discounts 106

Accounts receivable 5,300

Explanation:

Preparation of the journal entry that Vander makes on September 18

Preparation of the journal entries made that Vander made earlier

Sep. 12

Dr Accounts receivable 5800

Cr Sales revenue 5800

(Being to record sales on account)

Sep. 14

Dr Sales returns and allowances 500

Cr Accounts receivable 500

(Being to record sales returns)

Preparation of the Journal entry that Vander makes on September 18

Sep. 18

Dr Cash 5194

[($5,800 -$500)- $106]

Cr Sales discount 106

[($5,800-$500) - (2% x $5,300)]

Cr Accounts receivable 5,300

($5,800 - $500)

(Being to record collection on account)