Exercise 7-5 (Part Level Submission) On June 3, Marigold Company sold to Chester

Question

Exercise 7-5 (Part Level Submission) On June 3, Marigold Company sold to Chester Company merchandise having a sale price of $5,600 with terms of 3/10, n/60, f..b. shipping point. An invoice totaling $95, 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. Your answer is correct. Prepare journal entries on the Marigold 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 ceivables are entered at net of cash discounts. (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 the amount is entered. Do not indent manually.) No. Date Account Titles and Explanation (1) June 3 Accounts Receivable Debit Credit 5600 Sales Revenue 5600 June 12 Cash 5432 Sales Discounts 168 Accounts Receivable 5600

Explanation / Answer

Solution b:

Journal Entries - Marigold No Date Particulars Debit Credit b 29-Jul Cash Dr $5,600.00        To Accounts receivables $5,432.00        To Sales discount forfeited $168.00 (To record collection from receivables)

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