answers with the exercise number and show all your computations Exercise # 1 Pre
ID: 2567708 • Letter: A
Question
answers with the exercise number and show all your computations Exercise # 1 Presented below is information from Lopez Computers Incorporated July 1 10 Sold $30,000 of computers to Smallwood Company with terms 3/15, n/60. Lopez uses the gross method to record cash discounts Lopez received payment from Smallwood for the full amount owed from the July transactions. Sold $250,000 in computers and peripherals to The Clark Store with terms of 2/10, n/30. 17 30 The Clark Store paid Lopez for its purchase of July 17. Instructions Prepare the necessary journal entries for Lopez Computers. (10 pts.) Exercise # 2 Sandel Company reports the following financial information before adjustments. Dr Cr $160,000 Accounts Receivable Allowance for Doubtful Accounts Sales Revenue (all on credit) Sales Returns and Allowances $2,000 800,000 am 50,000 udExplanation / Answer
Since multiple questions are posted , the first appearing question is answered below, you can also find answer to exercise 2: below it....(please post one or two questions at a time).
exercise 1;: The journal entries for Lopez computers are given below:
Exercise 2.
a.Assuming 1% of net sales is the bad debts.
first let us calculate the net sales:
net sales = sales revenue - sales returns and allowances
=>800,000 - 50,000
=>750,000.
1% of 750,000 = $7,500.
jounnal entry :
(being bad debts estimated to be 1% of net sales)
b. 5% of accounts receivable.
Accounts receivable = $160,000.
5% of accounts receivable = $160,000 *5%=>$8,000.
already existing balance in allowance for doubtful accounts = $2,000.
new provision = $8,000 - 2000=>$6,000.
journal entry:
Date General journal Debit Credit July 1 Accounts receivable a/c $30,000 ........To sales revenue a/c $30,000 (being sales made to smallwood company and gross method is used) July 10 Cash a/c $29,100 sales discount a/c $900 ..........To Accounts receivable a/c $30,000 (being cash received from small wood with in 15 days and discount of 3% availed =>$30,000 *3%=>$900) 17 Accounts receivable a/c $250,000 ...........To Sales revenue a/c $250,000 (beng sale made to The clark store) 30 Cash a/c $250,000 .........To Accounts receivable a/c $250,000 (being amount received from clark store in full, since payment is made after discount period of 10 days).Related Questions
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