Question

Required information (The following information applies to the questions displayed below) Tracy Company, a manufacturer of air conditioners, sold 200 units to Thomas Company on November 17, 2021. The units have a list price of $650 each, but Thomas was given a 30% trade discount. The terms of the sale were 3/10, 1/30. Required: 1. Prepare the journal entries to record the sale on November 17 ignore cost of goods) and collection on November 26, 2021, assuming that the gross method of accounting for cash discounts is used 2. Prepare the journal entries to record the sale on November 17 ignore cost of goods) and collection on December 15, 2021 assuming that the gross method of accounting for cash discounts is used. Complete this question by entering your answers in the tabs below. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2021, assuming that the gross method of accounting for cash discounts is used. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction ist Journal entry worksheet Record the sale of 200 units with a list price of $650, a 30% trade discount (if applicable), with terms of 3/10, 1/30 under the gross method. Note: Enter debits before credit Date General Journal Debit Credit Record entry Clear entry View general Journal

Answer 1

1.

Journal

November 17	Accounts receivable - Thomas Company	91,000
	Sales		91,000
November 26	Cash	88,270
	Sales discount	2,730
	Accounts receivable - Thomas Company		91,000

List price = $650 per unit

Trade discount = 30%

= 650 x 30%

= $195

Selling price per unit = List price - Trade discount

= 650 - 195

= $455

Total sales = Selling price per unit x Number of units sold

= 455 x 200

= $91,000

Sales discount = Sales x Discount rate

= 91,000 x 3/10

= $2,730

Cash received from Thomas Company = Total sales - Sales discount

= 91,000 - 2,730

= $88,270

2.

Journal

November 17	Accounts receivable - Thomas Company	91,000
	Sales		91,000
December 15	Cash	91,000
	Accounts receivable - Thomas Company		91,000

Please ask if you have any query related to the question. Thank you