Question

Practice Exercise 18-2 Grouper Inc. sells goods to Brooks Corp. on account on January 2, 2017. The goods have a sales price of $525,000 (cost of $424,000). The terms are net 30. If Brooks pays within 6 days, however, it receives a cash discount of $7,200. A history of past similar transactions indicates that Brooks will take the cash discount. On January 7, 2017, Brooks makes payment to Grouper for the full sales price.

Your answer is partially correct. Try again. Prepare the journal entry(ies) to record the sale and related cost of goods sold for Grouper Inc. on January 2, 2017, and the payment on January 7, 2017. Assume that Grouper records the January 2, 2017, transaction using the net method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 2, 2017Jan. 7, 2017 (To record sales) (To record cost of goods sold) Jan. 2, 2017Jan. 7, 2017 SHOW LIST OF ACCOUNTS LINK TO TEXT

Your answer is incorrect. Try again. Prepare the journal entry(ies) to record the sale and related cost of goods sold for Grouper Inc. on January 2, 2017, and the payment on January 7, 2017. Assume that Grouper records the January 2, 2017, transaction using the gross method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 2, 2017 (To record sales) (To record cost of goods sold) Jan. 7, 2017

Answer 1

Transaction using the NET Method:

Data	Particulars	Debit	Credit
Jan, 2, 2017	Brooks Corp. A/c Dr. ($525000 - $7200)	$517800
	To Sales		$517800
	(to record sales)
	Cost of Goods Sold A/c Dr.	$424000
	To Inventory		$424000
Jan. 7, 2017	Cash A/c Dr.	$517800
	To Brooks Corp. A/c		$517800

Transaction using the GROSS Method:

Data	Particulars	Debit	Credit
Jan, 2, 2017	Brooks Corp. A/c Dr.	$525000
	To Sales		$525000
	(to record sales)
	Cost of Goods Sold A/c Dr.	$424000
	To Inventory		$424000
Jan. 7, 2017	Cash A/c Dr.	$517800
	Cash Discount	$7200
	To Brooks Corp. A/c		$525000