Answer:
Explanation:
JOURNAL
Date Account Title & Explanation Post Debit ($) Credit($)
Ref.
3- May Inventory 16,000
Cash 16,000
(To record the purchase at 8
per $ for 2000 units
5-May Account receivable 12,000
Sales 12,000
(To record the sales on account)
5- May Cost of goods sold 8000
Inventory 8000
(To record Cost of goods sold)
7- May Sales return & allowance 1,200
Account receivable 1,200
(To record the sales return)
7- May Inventory 800
Cost of good sold 800
(To record the cost of inventory
restored to Allied Company)
8- May Sales return allowance 400
Account receivable 400
(To record the credit of $400 given
to Macy company for compensate of
damage)
15- May Cash 10,192
Sales discount 208
Account receivable 10400
(To record the cash received within
discount period)
N:B
From above ; on May 15 ;
We determine the accounts receivable amount after sales return and allowances;
i.e
Account receivable = Sales - Sales return - Compensation Period
= $12,000 -$1,200 - $ 400
= $10,400
The cash discount = Account receivable × 2 %
= $10,400 × 0.02
= $208
The cash received amount = Account receivable × 98%
= $10,400 × 0.98
= $10,192
I hope that helps alot!
