Q30E
Question
Journalize the following sales transactions for Straight Shot Archery using the periodic inventory system. Explanations are not required. The company estimates sales returns and allowances at the end of each month.
Aug. 1 Sold \(6,500 of equipment on the account; credit terms are 1/10, n/30.
8 Straight Shot received payment from the customer on the amount due from August 1, less the discount.
15 Sold \)3,100 of equipment on the account; credit terms are n/45, FOB destination.
15 Straight Shot paid \(90 on freight out.
20 Straight Shot negotiated a \)500 allowance on the goods sold on August 15.
24 Received payment from the customer on the amount due from August 15, less the allowance.
Step-by-Step Solution
VerifiedThe total of debits and credits is $19,290.
In accounting, the term discount refers to the reduction in the price of a product or service provided by the seller with a motive to receive immediate payments from the buyers. Discount is considered an expense for the seller and other revenue for the buyer.
Date | Accounts and Explanation | Debit ($) | Credit ($) |
Aug 1 | Accounts receivable | 6,500 |
|
| Sales |
| 6,500 |
Aug 8 | Cash | 6,435 |
|
| Sales discount (6500*1%) | 65 |
|
| Accounts receivable |
| 6,500 |
Aug 15 | Accounts receivable | 3,100 |
|
| Sales |
| 3,100 |
Aug 15 | Freight-out | 90 |
|
| Cash |
| 90 |
Aug 20 | Sales returns and allowances | 500 |
|
| Accounts receivables |
| 500 |
Aug 24 | Cash | 2,600 |
|
| Accounts receivable (3100-500) |
| 2,600 |