On July 18, 2021, Philly Furniture Factory sold 20 reclining rockers to Dave's Discount Furniture for $8,000, subject to terms 2/10, n/30. Philly uses the net method of accounting for sales discounts. Required: 1. Prepare the journal entry to record the sale. 2 & 3. Prepare the journal entries to record receipt of the payment, assuming the correct amount was received on July 26, 2021 and August 15, 2021.

On July 18, 2021, Philly Furniture Factory sold 20 reclining rockers to Dave's Discount Furniture for $8,000, subject to terms 2/10, n/30. Philly uses the net method of accounting for sales discounts. Required: 1. Prepare the journal entry to record the sale. 2 & 3. Prepare the journal entries to record receipt of the payment, assuming the correct amount was received on July 26, 2021 and August 15, 2021.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 15EA: Resin Milling issued a $390,500 note on January 1, 2018 to a customer in exchange for merchandise....

See similar textbooks

Similar questions

Sunrise Flowers sells flowers to a customer on credit for $130 on October 18, with a cost of sale to Sunrise of $50. What entry to recognize this sale is required if Sunrise Flowers uses a periodic inventory system?
Mark Industries issues a note in the amount of $45,000 on August 1, 2018 in exchange for the sale of merchandise. Which of the following is the correct journal entry for this sale? A. B. C. D.
Review the following transactions and prepare any necessary journal entries for Tolbert Enterprises. A. On April 7, Tolbert Enterprises contracts with a supplier to purchase 300 water bottles for their merchandise inventory, on credit, for $10 each. Credit terms are 2/10, n/60 from the invoice date of April 7. B. On April 15, Tolbert pays the amount due in cash to the supplier.
Resin Milling issued a $390,500 note on January 1, 2018 to a customer in exchange for merchandise. The merchandise had a cost to Resin Milling of $170,000. The terms of the note are 24-month maturity date on December 31, 2019 at a 5% annual interest rate. The customer does not pay on its account and dishonors the note. Record the journal entries for Resin Milling for the following transactions. A. Initial sale on January 1, 2018 B. Dishonored note entry on January 1, 2020, assuming interest has not been recognized before note maturity
On June 1, 2023, AAA Company sold merchandise with an invoice price of 5,000,000 to a customer. The entity allowed trade discounts of 15%, and 10%. Credit terms were 3/10, n/30 and the sale was made FOB destination. AAA Company paid 100,000 of the delivery cost. a. Compute the total amount of purchases to be included on the buyer’s inventory in the determination of cost of goods available for sale if payment was made beyond the discount period. b. What is the full amount received by AAA company if payment was made on June 11, 2023?
On June 30, 2021, the Esquire Company sold some merchandise to a customer for $30,000. In payment, Esquire agreed to accept a 6% note requiring the payment of interest and principal on March 31, 2022. The 6% rate is appropriate in this situation.Required:1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2021 interest accrual, and the March 31, 2022 collection. (Do not round intermediate calculations.)2. If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be over-or understated in 2021 and 2022?
On June 30, 2021, the Esquire Company sold some merchandise to a customer for $30,000. In payment, Esquire agreed to accept a 6% note requiring the payment of interest and principal on March 31, 2022. The 6% rate is appropriate in this situation.Required:1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2021 interest accrual, and the March 31, 2022 collection.2. If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be over- or understated in 2021 and 2022?
Eastman Corporation sells merchandise with a list price of $13,000 on February 1, 2019, with terms of 1/10, n/30. On February 10, 2019, payment was received on merchandise originally billed for $7,500, and the balance due was received on March 1, 2019. Required: 1. Prepare the journal entries to record the preceding information assuming that Eastman records accounts receivable and sales at (a) the gross price and (b) the net price. 2. Next Level What implied annual interest rate is Eastman’s customer incurring by failing to take the cash (sales) discount? (Assume a 365-day year.) 3. Next Level Which method—recording accounts receivable at the gross price or net price—is theoretically superior? Why?
Huhu Company and Hihi Company engaged in the following transactions during the month of July 2021. On July 16, Huhu Company sold merchandise to Hihi Company for P6,000, terms 2/10, n/30. Shipping costs were P600. Hihi Company received the goods and Huhu Company’s invoice on July 17. On July 24, Hihi Company sent the payment to Huhu, which Huhu received on July 25. Additional Info: Both Huhu and Hihi use the periodic inventory system. The arrangement regarding the shipping costs are as follows: Shipping terms FOB destination, Freight Collect. Hihi paid the shipping costs on July 17 and deducted the P600 from the amount owed to Huhu Company. A copy of freight bill to Huhu Company was provided with the July 24 cash remittance. Hihi remitted P5,280 on July 24. How much is the accounts payable of Hihi before remittances?
On October 1, 2020, Brosnan Company sells (factors) $800,000 of receivables to Nation Factors, Inc. Nation assesses a service charge of 3% of the amount of receivables sold. The journal entry to record the sale by Brosnan will include:
They sold $50,000 worth of goods on credit, with terms 3/10, n/20, on 2/1/2021. Record this journal entry using both the net and gross methods. Record the journal entry if the customer pays off this account on 2/5/2021. Record the journal entry if the customer pays off this account on 3/1/2021.
On June 30, 2024, the Esquire Company sold some merchandise to a customer for $56,000. In payment, Esquire agreed to accept a 8% note requiring the payment of interest and principal on March 31, 2025. The 8% rate is appropriate in this situation. Required: Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2024 interest accrual, and the March 31, 2025 collection. If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be over- or understated in 2024 and 2025? Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2024 interest accrual, and the March 31, 2025 collection.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. June…