Use the following data to answer questions the next 3 questions On November 10 of the...
Use the following data to answer questions the next 3 questions
On November 10 of the current year, Cherokee Industries sold materials to a customer for $8,000 with credit terms 2/10, n/30. Cherokee uses the net method of accounting for cash discounts
- What entry would Cherokee make on November 10?
- What entry would Cherokee make on November 17, assuming the correct payment was received on that date?
- What entry would Cherokee make on December 10, assuming the correct payment was received on that date?
Homework Answers
Discount = $8,000 * 2% = $160
Accounts receivable = $8,000 - $160 = $7,840
| Nov. 10 | Accounts receivable | $7,840 | |
| Sales | $7,840 |
| Nov. 17 | Cash | $7,840 | |
| Accounts receivable | $7,840 |
| Dec. 10 | Cash | $8,000 | |
| Accounts receivable | $7,840 | ||
| Discount not taken | $160 |
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