Question

Transactions for Buyer and Seller Slevert Co. sold merchandise to Angelleti Co, on account, $8,500, terms 2/15, n/30. The cost of merchandise sold is $5,100. Assume all discounts are taken. Journalize Sievert Co.'s entries for (a) the sale on account and (b) the collection of the amount due. (al Accounts Receivable-Angelleti Co. Sales Cost of Merchandise Sold 5,100 Merchandise Inventory 5,100 (b) Cash Accounts Receivable-Angelleti Co. Journalize Angelleti Co.'s entries for (a) the purchase of merchandise on account and (b) the payment of the amount due. (al Merchandise Inventory Accounts Payable-Sievert Co. (b) Accounts Payable-Slevert Co. Cash

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Answer 1

This question requires net method of recording discounts, which means sales & purchases are initially recorded after considering the discounts to be given or taken. a) 8330 Accounts Receivable - Angelleti Co. (8500 - 170) Sales (Discount = 8500 x 2% = 170) 8330 5100 Cost of Merchandise sold Merchandise Inventory 5100 b) 8330 Cash Accounts Receivable - Angelleti Co. 8330 a) 8330 Merchandise Inventory Accounts payable - Sievert Co. 8330 b) 8330 Accounts payable - Sievert Co. Cash 8330

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