On June 3, Concord Company sold to Chester Company merchandise having a sale price of $3,300 with terms of 2/10, n/60, f.o.b. shipping point. An invoice totaling $94, terms n/30, was received by Chester on June 8 from John Booth Transport Service for the freight cost. On June 12, the company received a check for the balance due from Chester Company.     Prepare journal entries on the Concord Company books to record all the events noted above under each of the following bases.(1) Sales and receivables are entered at gross selling price.(2) Sales and receivables are entered at net of cash discounts.

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Asked Oct 15, 2019
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On June 3, Concord Company sold to Chester Company merchandise having a sale price of $3,300 with terms of 2/10, n/60, f.o.b. shipping point. An invoice totaling $94, terms n/30, was received by Chester on June 8 from John Booth Transport Service for the freight cost. On June 12, the company received a check for the balance due from Chester Company.

 
 
 
 
 
Prepare journal entries on the Concord Company books to record all the events noted above under each of the following bases.

(1)   Sales and receivables are entered at gross selling price.
(2)   Sales and receivables are entered at net of cash discounts.
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Expert Answer

Step 1

Accounts Receivable:

 

Accounts receivables represent the amount of money owed by one business to another as a result of a credit transaction. It is an asset account recorded in the balance sheet of a company.

Step 2

Requirement (1):

 

Journalize the transactions of Concord Company if their sales and receivables are entered at gross selling price.

 

a. Pass a journal entry to record the sales made by Concord Company to Chester Company for $3,300.

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L.F Debit (S) Credit (S) 3,300 Date Account Title and Explanation 3-Jun Accounts Receivable - Chester Company Sales Revenue (To record the sales made to Chester Company) 3,300

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Step 3

b. Pass a journal entry to record the...

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L.F Debit (S) Credit (S) 3,234 66 (1) Date Account Title and Explanation 12-Jun Cash Sales Discount Accounts Receivable - Chester Company (To record the sales discount) 3,300 Working Note: (1) Compute the value of sales discount allowed to Chester Company Sales Discount = Account Receivable x Discount Percentage =$3,300x2% -$66

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