Question

On April 2, Kelvin sold $35500 of inventory items on credit with the terms 1/10, net 30. Payment on $21300 sales was received on April 8 and the remaining payment on $14200 sales was received on April 27. Assuming Kelvin uses the net method of accounting for sales discounts, the entry recorded on April 27 would include:________.
a: debit to Cash and credit to Accounts Receivable for $14058.
b. debit to Cash and credit to Sales Discounts Forfeited for $355.
c. debit to Accounts Receivable and credit to Sales Revenue for $35500.
d. debit to Cash for $14200 and credit to Sales Discounts Forfeited for $142.

Answer 1

Answer:

d. debit to Cash for $14200 and credit to Sales Discounts Forfeited for $142

Explanation:

Based on the information given Assuming Kelvin uses the net method of accounting for sales discounts, the journal entry recorded on April 27 would include:debit to Cash for $14200 and credit to Sales Discounts Forfeited for $142

A..Dr Accounts receivable 142

Cr Sales Discount forfeited 142

(1%*$14200)

B. Dr Cash $14,200

Cr Accounts receivable$14,200