Question

please complete both required parts to question

Required information Exercise 7-5 (Algo) Trade and cash discounts; the gross method and the net method compared (LO7-3] The following information applies to the questions displayed below. Tracy Company, a manufacturer of air conditioners, sold 150 units to Thomas Company on November 17, 2021. The units have a list price of $560 each, but Thomas was given a 25% trade discount. The terms of the sale were 2/10, n/30 Exercise 7-5 (Algo) Part-1 Required: 1. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2021, assuming that the gross method of accounting for cash discounts is used. 2. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on December 15, 2021, assuming that the gross method of accounting for cash discounts is used. Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2021, assuming that the gross method of accounting for cash discounts is used. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list

Answer 1

Credit No. 1. Date November it 2021 Debit $63,000 General Journal accounts Receivable Sales Revenue (70 record sales) $63,000 Nov. 26 2021 Cash $61,740 $1,260 sales discounts Accounts Receivable (To record cash collection) $ 63,000 NO credit Date NOV 17, 2021 Debit $ 63,000 General Journal Accounts Receivable sales revenue (to record sales) $63,000 Dec 15, dod) $ 63,000 cash Accounts Receivable to record cash collection) $ 63,000

Calculation : (1) Sales Revenue a Units sold & List Price x (100% - Trade Discount %) = 150 units X $560* (100% - 25%) e 150 units X $560 X 75% = $ 63,000 & Nov. 26, 2021 : Sales Discounts a Sales & Discount % = $ 63,000 X 2% = $1, 260 Cash & accounts Receivable – Sales Discounts = $ 63,000 - $ 1,260 $ 61,740