Question

Scott's Cycles sells merchandise on credit terms of 2/15, n/30. A sale invoiced at $1,300 (cost of sales $870) was made to Shannon Allen on February 1. The company uses the gross method of recording sales discounts. Required: 1. Give the journal entry to record the credit sale. Assume use of the perpetual inventory system. 2. Give the journal entry, assuming that the account was collected in full on February 9. 3. Give the journal entry, assuming instead that the account was collected in full on March 2. On March 4, the company purchased bicycles and accessories from a supplier on credit, invoiced at $9,200, the terms were 3/10, n/30. The company uses the gross method to record purchases. Required: 4. Give the journal entry to record the purchase on credit. Assume the use of the perpetual inventory system. 5. Give the journal entry, assuming that the account was paid in full on March 12. 6. Give the journal entry, assuming, instead, that the account was paid in full on March 28. Complete this question by entering your answers in the tabs below. Req 1 to 3 Req 4 to 6 1. Give the journal entry to record the credit sale. Assume use of the perpetual inventory system. 2. Give the journal entry, assuming that the account was collected in full on February 9. 3. Give the journal entry, assuming instead that the account was collected in full on March 2. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Show less View transaction list

Answer 1

	Date	General Journal	Debit	Credit
1	Feb 1	Account Receivable	1,300
		Sales		1,300
		Cost of Goods Sold	870
		Inventory		870
2	Feb 9	Cash	1,274
		Sales Discounts	26		($1,300 x 2%)
		Account Receivable		1,300
3	Mar 2	Cash	1,300
		Account Receivable		1,300
	Date	General Journal	Debit	Credit
4	Mar 4	Inventory	9,200
		Accounts Payable		9,200
5	Mar 12	Accounts Payable	9,200
		Inventory		276	($9,200 x 3%)
		Cash		8,924
6	Mar 28	Accounts Payable	9,200
		Cash		9,200