Question 3 (15 points) Alpha Company used the periodic inventory system for purc
ID: 2413108 • Letter: Q
Question
Question 3 (15 points)
Alpha Company used the periodic inventory system for purchase & sales of merchandise. Discount terms for both purchase & sales are, FOB Destination, 2/10, n30. > Alpha Company sold on account merchandise to Bravo Company on May 2, 2016. Selling price was $4,000 > Bravo Company returned to Alpha Company on May 3, 2016 merchandise in the amount of $400. Use this information to prepare Alpha Company's compound General Journal entry (without explanation) for the payment for merchandise on May 12.
Explanation / Answer
Answer
Since payment is received on May 12 (invoice/sales date =may 2) which is within 10 days of sales made, Sales discount will be given.
Date
Accounts title
Debit
Credit
02-May-16
Accounts receivables
$ 4,000.00
Sales revenue
$ 4,000.00
(merchandise sold)
03-May-16
Sales Return
$ 400.00
Accounts receivables
$ 400.00
(merchandise returned by customer)
12-May-16
Cash [3600 x 98%]
$ 3,528.00
Sales Discount [3600 x 2%]
$ 72.00
Accounts receivables [4000 – 400]
$ 3,600.00
(payment received for merchandise sold and sales discount given)
Date
Accounts title
Debit
Credit
02-May-16
Accounts receivables
$ 4,000.00
Sales revenue
$ 4,000.00
(merchandise sold)
03-May-16
Sales Return
$ 400.00
Accounts receivables
$ 400.00
(merchandise returned by customer)
12-May-16
Cash [3600 x 98%]
$ 3,528.00
Sales Discount [3600 x 2%]
$ 72.00
Accounts receivables [4000 – 400]
$ 3,600.00
(payment received for merchandise sold and sales discount given)
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