Question

(a) On July 1, Blue Spruce Co. sold merchandise on account to Waegelein Inc. for $17,300, terms 2/10, n/30. (b) On July 8, Waegelein Inc. returned merchandise worth $4,000 to Blue Spruce Co. (c) On July 11, Waegelein Inc. paid for the merchandise. Account Titles and Explanation Debit Credit (a) enter an account title Accounts Receivable enter a debit amount 17300 enter a credit amount enter an account title Sales Revenue enter a debit amount enter a credit amount 17300 (b) enter an account title Sales Returns and Allowances enter a debit amount 4000 enter a credit amount enter an account title Accounts Receivable enter a debit amount enter a credit amount 4000 (c) enter an account title Cash enter a debit amount enter a credit amount enter an account title Sales Discounts enter a debit amount enter a credit amount enter an account title Accounts Receivable enter a debit amount enter a credit amount

Answer 1

Answer and Explanation:

The journal entries are shown below:

On July 1

Account receivable A/c Dr $17,300

         To Sales $17,300

(Being the goods are sold on credit)

On July 8

Sales return and allowance A/c Dr $4,000

          To Accounts receivable $4,000

(Being sales return is recorded)

On July 11

Cash  ($17,300 - $4,000) × 98%        $13,034

Sales discount  ($17,300 - $4,000) × 2% $266

       To Account receivable ($17,300 - $4,000) $13,300

(Being the cash received is recorded)

Only these three entries are recorded