Spruce Company purchased $8,250 of merchandise on October1 with terms 1/10, n/30
ID: 2471445 • Letter: S
Question
Spruce Company purchased $8,250 of merchandise on October1 with terms 1/10, n/30. On October 3 it returned $1,250 worth of merchandise. On October 10 Spruce paid the full amount due. The amount of the discount Spruce recorded was::
A. $70.00
B. $1.25
C. $700.00
D. $12.50
On February 3, Smart Company sold merchandise in the amount of $5,800 to Truman Company, with credit terms of 2/10, n30. The cost of the items sold is $4,000. The journal entry to record the sale includes:
A. Debit to Accounts Payable for $5,800.
B. Debit to Accounts Receivable for $4,000.
C. Debit to Accounts Receivable for $5,800.
D. Debit to Sales of $4,000.
On February 3, Smart Company sold merchandise in the amount of $5,800 to Truman Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. The journal entry to record the sale includes a:
A. debit Cost of Goods Sold $4,000, credit Merchandise Inventory $4,000.
B. debit Sales $4,000, credit Merchandise Inventory $4,000.
C. debit Merchandise Inventory $5,800, credit Cost of Goods Sold $5,800.
D. Debit Accounts Receivable $4,000, credit Cost of Goods Sold $4,000.
On February 3, Smart Company sold merchandise in the amount of $5,800 to Truman Company with credit terms of 2/10,n/30. The cost of the items sold is $4,000. Truman pays the invoice on February 8 and takes the appropriate discount. The journal entry Smart records on February 8 is:
A. Debit Cash $5,800, credit Accounts Payable $5,800.
B. Debit Cash $4,000, Accounts Receivable $4,000.
C. Debit Cash $3,920, credit Sales Discount $80, credit Accounts Receivable $4,000.
D. Debit Cash $5,684, debit Sales Discount $116, credit Accounts Receivable $5,800
Explanation / Answer
1) correct option is "A" -70
Discount = [(8250-1250) = 7000*.01 = 70 ]
2)correct option is "C" -Debit to Accounts Receivable for $5,800
Entry Debit accounts receivable ,credit sales with 5800
3)correct option is "A"-debit Cost of Goods Sold $4,000, credit Merchandise Inventory $4,000
This entry is made to record cost of sales in books.
4)correct option is "D{"-Debit Cash $5,684, debit Sales Discount $116, credit Accounts Receivable $5,800
Discount = 5800*.02 = 116
cAsh received = 5800 -116 = 5684
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