2SE
Question
Journalize the following sales transactions for Sierra Tractors. Explanations are not required.
June 5 Sierra sold \(20,000 of inventory on account, credit terms are 4/10, n/30. Cost of goods is \)10,000. Sierra uses the gross method to record sales revenue.
12 Sierra receives payment from the customer on the amount due, less the discount.
Step-by-Step Solution
VerifiedThe total of debits and credits is $50,000.
In accounting, a discount denotes the reduction in the price of the goods or services purchased or sold by a business concern. Discount is bifurcated into two categories for identifying the revenue or expense, i.e., sales discount and purchase discount.
Date | Accounts and Explanation | Debit ($) | Credit ($) |
Jun 5 | Accounts receivable | 20,000 |
|
| Sales revenue |
| 20,000 |
Jun 5 | Cost of goods sold | 10,000 |
|
| Merchandise inventory |
| 10,000 |
Jun 12 | Cash | 19,200 |
|
| Sales discount (20000*4%) | 800 |
|
| Accounts receivable |
| 20,000 |