Question

Flint Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2020. The goods have a sales price of $669,100 (cost of $540,000). The terms are net 30. If Danone pays within 5 days, however, it receives a cash discount of $9,100. Past history indicates that the cash discount will be taken. On January 28, 2020, Danone makes payment to Flint for the full sales price. Prepare the journal entry(les) to record the sale and related cost of goods sold for Flint Company on January 2, 2020, and the payment on January 28, 2020. Assume that Flint Company records the January 2, 2020, transaction using the net method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit (To record sales) (To record cost of goods sold) (To record payment received)

Answer 1

Under Net method:

Date	Account Titles and Explanation	Debit	Credit
Jan 2,2020	Notes receivable [669,100 - 9,100 Disc.]	$660,000
	Sales revenue		$660,000
	[To record sales]
	Cost of goods sold	$540,000
	Inventory		$540,000
	[To record cost of goods sold]
Jan 28,2020	Notes receivable	$660,000
	Discount lost	$9,100
	Cash		$669,100
	[To record payment received]

Under gross method:

Date	Account Titles and Explanation	Debit	Credit
Jan 2,2020	Notes receivable	$669,100
	Sales revenue		$669,100
	[To record sales]
	Cost of goods sold	$540,000
	Inventory		$540,000
	[To record cost of goods sold]
Jan 28,2020	Notes receivable	$669,100
	Cash		$669,100
	[To record payment received]