Question

wwwy www [The following information applies to the questions displayed below) Tracy Company, a manufacturer of air conditioners, sold 100 units to Thomas Company on November 17, 2021. The units have a list price of $800 each, but Thomas was given a 25% trade discount. The terms of the sale were 2/10, n/30. Exercise 7-5 (Algo) Part - 2 3-a. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2021, assuming that the net method of accounting for cash discounts is used. 3-b. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on December 15, 2021, assuming that the net method of accounting for cash discounts is used. ® Answer is not complete. Complete this question by entering your answers in the tabs below. Red 3A Reg 3B Prepare the journal entries to record the sale on November 17 (ignore cost of goods and collection on November 26, 2021, assuming that the net 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.) No Date General Journal Credit Debit 80,000 November 17, 202 Accounts receivable Sales revenue 80.000 X November 26, 202 Cash Sales discounts Accounts receivable 78,400 1,600 x 80.000 X 3 Rogn Req3B >

Answer 1

Requirement 3a: (Net method & Cash received within discount period)

Date	Account title and Explanation	Debit	Credit
Nov 17,2021	Accounts receivable [60,000 x 0.98]	$58,800
	Sales revenue		$58,800
	[To record credit sales]
Nov 26,2021	Cash	$58,800
	Accounts receivable		$58,800
	[To record collections from customers]

Requirement 3a: (Net method & Cash received after discount period)

Date	Account title and Explanation	Debit	Credit
Nov 17,2021	Accounts receivable [60,000 x 0.98]	$58,800
	Sales revenue		$58,800
	[To record credit sales]
Dec 15,2021	Cash	$60,000
	Discount lost [60,000 x 0.02]		$1,200
	Accounts receivable		$58,800
	[To record collections from customers]

Calculations:

Sales revenue = 100 units x [$800 list price - ($800 x 25% trade discount)]

= 100 units x [$800 - $200]

= 100 units x $600

= $60,000