Question

Current Attempt in Progress On June 3, Shamrock Company sold to Chester Company merchandise having a sale price of $4,200 with terms of 3/10, n/60, f.o.b. shipping point. An invoice totaling $98, terms n/30, was received by Chester on June 8 from John Booth Transport Service for the freight cost. On June 12, the company received a check for the balance due from Chester Company. Prepare journal entries on the Shamrock Company books to record all the events noted above under each of the following bases. (1) Sales and receivables are entered at gross selling price. (2) Sales and receivables are entered at net of cash discounts. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Debit Credit No. Date Account Titles and Explanation (1)

how can I solve these two questions?

Answer 1

Dear Student ,

Please see below line by Line JE in case of gross and net basis of sale . collection and discount entry . Any doubt , please drop me message .

Thank you !!

	Shamrock Company Sold to Chester Company
	Sales price $		4,200
	Terms	3/10	n/60
	Basis	FOB Shipping
	Shipping point , A Invoie totalling $98 , terms n/30
	received by Chestler on 08th June
	On Jun12 - Company received check for the balance
	due from chestler Company
	Following Journal Entries is important to account
	Sales and receivable accounted at Gross Selling price
	Sales and receivable accounted at Net Selling price
Gross Basis of Accounting
		Details	Debit($)	Credit($)
June 3	Account Receivable		4,200
	Sales			4,200
	Record Sales Trasaction - Gross Method
June 8	Freight Expenses		98
	cash			98
	( paid frieght expenses at shipping point )
June 12	cash		4,074
	Discount on Sales		126
	Account Receivable			4,200
	discount value=($4200*3%- 3/10 concept)
	( to account collection of money
	on Gross basis)
Net Basis of Accounting
June 3	Account Receivable		4,074
	Sales			4,074
	Record Sales Trasaction - Net Method
June 8	Freight Expenses		98
	cash			98
	( paid frieght expenses at shipping point )
June 12	cash		4,074
	Account Receivable			4,074
	( to account collection of money
	On Net Method basis )
Final Journal entry
	cash		4,200
	Discount on Sales			126
	Account Receivable			4,074
	( finally recorded cash collection )