Question

The following transactions are for Splish Brothers Company.

1.		On December 3, Splish Brothers Company sold $515,600 of merchandise to Sunland Co., on account, terms 3/10, n/30. The cost of the merchandise sold was $320,500.
2.		On December 8, Sunland Co. was granted an allowance of $24,000 for merchandise purchased on December 3.
3.		On December 13, Splish Brothers Company received the balance due from Sunland Co.

(a)

Prepare the journal entries to record these transactions on the books of Splish Brothers. Splish Brothers uses a perpetual inventory system. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.	Date	Account Titles and Explanation	Debit	Credit
1.	Choose a transaction date for number 1                                                          Dec. 3Dec. 8Dec. 13Jan. 2	Enter an account title for journal entry 1 to record credit sale	enter a debit amount	enter a credit amount
		Enter an account title for journal entry 1 to record credit sale	enter a debit amount	enter a credit amount
		(To record sale of merchandise on account)
	Choose a transaction date for number 1                                                          Dec. 3Dec. 8Dec. 13Jan. 2	Enter an account title for journal entry 2 to record cost of merchandise sold	enter a debit amount	enter a credit amount
		Enter an account title for journal entry 2 to record cost of merchandise sold	enter a debit amount	enter a credit amount
		(To record cost of merchandise sold on account)
2.	Choose a transaction date for number 2                                                          Dec. 3Dec. 8Dec. 13Jan. 2	Enter an account title for the third journal entry	enter a debit amount	enter a credit amount
		Enter an account title for the third journal entry	enter a debit amount	enter a credit amount
3.	Choose a transaction date for number 2                                                          Dec. 3Dec. 8Dec. 13Jan. 2	Enter an account title for the journal entry on December 13	enter a debit amount	enter a credit amount
		Enter an account title for the journal entry on December 13	enter a debit amount	enter a credit amount
		Enter an account title for the journal entry on December 13	enter a debit amount	enter a credit amount

(b)

Assume that Splish Brothers Company received the balance due from Sunland Co. on January 2 of the following year instead of December 13. Prepare the journal entry to record the receipt of payment on January 2. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 2	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

Answer 1

a) Journal entry

date	account and explanation	Debit	Credit
Dec 3	Account receivable	515600
	Sales revenue		515600
	(To record sale of merchandise on account)
	Cost of goods sold	320500
	Inventory		320500
	(To record cost of merchandise sold on account)
Dec 8	Sales allowance	24000
	Account receivable		24000
Dec 13	Cash (491600*97%)	476852
	Sales discount	14748
	Account receivable (515600-24000)		491600

Journal entry

Date	account and explanation	Debit	Credit
Jan 2	Cash	491600
	Account receivable (515600-24000)		491600