Question

Saved Help Save & Exit Submit Check my work Harwell Company manufactures automobile tires. On July 15, 2021, the company sold 1,000 tires to the Nixon Car Company for $50 each. The terms of the sale were 2/10,n/30. Harwell uses the net method of accounting for cash discounts Required: 1. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and payment on July 23, 2021. 2. Prepare the journal entries to record the sale on July 15 [ignore cost of goods) and payment on August 15, 2021 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and payment on July 23, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the sale of 1,000 tires for $50 each with a term of 2/10, n/30 under the net method of accounting for cash discounts. Note: Enter debits before credits General Journal Credit Date July 15, 2021 < Prev 10 of 10 Next >

Answer 1

SOLUTION

Net price = Gross price - Cash discount

= ($50*1,000) - (2%*$50*1,000)

= $50,000 - $1,000 = $49,000

S.No.	Date	Accounts titles and Explanation	Debit ($)	Credit ($)
1.	July 15	Accounts receivable	49,000
		Sales		49,000
		(To record the sales made on account)
	July 23	Cash	49,000
		Accounts receivable		49,000
		(To record amount received for sales)
2.	July 15	Accounts receivable	49,000
		Sales		49,000
		(To record the sales made on account)
	Aug.15	Cash	50,000
		Accounts receivable		49,000
		Sales discount		1,000
		(To record the amount received and sales discount forfeited)