Compute Net Sales for problems 1-3 1. Sold merchandise to Sam, who charged the $
ID: 2393244 • Letter: C
Question
Compute Net Sales for problems 1-3
1. Sold merchandise to Sam, who charged the $3,000 purchase on his Visa. Visa charges a 2% credit card fee
2. On July 15, sold merchandise to Marie at an invoice price of $9,000; terms 3/10, n/30. On July 23, company collected payment from Marie
3. On July 20, sold merchandise to Emily at an invoice price of $4,000; terms 3/10, n/30. On July 21, Emily returned a portion of the merchandise because it was defective, valued at $500. On August 20, company collected payment from Emily
Record bad debt expense and write off & Prepare journal entry for problems 4-6
4. On November 13 of the current year, an account receivable for $98,000 was determined uncollectable and written off
5. At year end, the appropriate bad debt expense adjustment of $20,000 was recorded.
6. On 12/1, $200 payment was received for an account previously written off. (hint 4 journal entries)
Explanation / Answer
Solution 1:
Net Sales = Gross sales - Visa Fee = $3,000 - ($3,000 * 2%) = $2,940
Solution 2:
Net Sales = Gross Sales - Sales discount = $9,000 - ($9,000*3%) = $8,730
Solution 3:
Net Sales = Gross sales - Sales return - Sales discount = $4,000 - $500 = $3,500
Discount is not applicable as payment is not received in 10 days of sale
Solution 4-6:
Journal Entries Event Date Particulars Debit Credit 4 13-Nov Allowance for doubtful accounts Dr $98,000.00 To Accounts receivables $98,000.00 5 31-Dec Bad debts expense Dr $20,000.00 To Allowance for doubtful accounts $20,000.00 (To record bad debts expense) 6a 12-Jan Accounts receivable Dr $200.00 To Allowance for doubtful accounts $200.00 (To reinstate accounts receivables) 6b 12-Jan Cash Dr $200.00 To Accounts receivables $200.00 (To record collection from customer previously written off)Related Questions
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