Question

Fi. Newell Company completed the following transactions in October: Credit Sales Sales Returns Date of Date Amount Terms Date Amount Collection $ 900 Oct. 3 2/10, n/30 Oct. 8. Oct. 14 $ 200 Oct. 11 1,200 3/10, n/30 Oct. 16 Oct. 17 5,000 1/10, n/30 Oct. 20 1,000 Oct. 29 Oct. 23 Oct. 21 2/10, n/60 1,700 200 Oct. 27 2/10, n/30 Oct. 27 Oct. 28 2,000 300 Oct. 23 Instructions Indicate the cash received for each collection. Show your calculations. (10%) (a) Prepare the journal entry for the following transactions: (b) Oct. 17 sale. The merchandise sold had a cost of $3,500. (2%) (1) Oct. 23 sales return. The merchandise returned had a cost of $140. (2%) (2) Oct. 28 collection. (2%) (3) Newell uses a perpetual inventory system. Coroach of the indenendent events listed below, analyze the impact on the indicated items at the e

Answer 1

a
	Date	Credit Sales	Sales return	Net receivable	Term	Date of Collection	Discount	Cash receipt after discount
	Oct.3	$                                      900		$                    900	2/10, n/30	Oct.8	$                     18	$                                             882
	Oct.11	$                                  1,200	$                        200	$                1,000	3/10, n/30	Oct.16	$                     30	$                                             970
	Oct.17	$                                  5,000	$                     1,000	$                4,000	1/10, n/30	Oct.29	$                      -	$                                         4,000
	Oct.21	$                                  1,700	$                        200	$                1,500	2/10, n/60	Oct.27	$                     30	$                                         1,470
	Oct.23	$                                  2,000	$                        300	$                1,700	2/10, n/30	Oct.28	$                     34	$                                         1,666

** As per terms in all transaction customer will get the discount if they paid within 10 days of sale.

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b
			Debit	Credit
1	Oct-17	Accounts Receivable	$                     5,000
		Sales		$                5,000
		Cost of goods sold	$                     3,500
		Merchandise Inventory		$                3,500
2	Oct-23	Sales return	$                        200
		Accounts Receivable		$                    200
		Merchandise Inventory	$                        140
		Cost of goods sold		$                    140
3	Oct-28	Cash	$                     1,666
		Discount Allowed	$                           34
		Accounts Receivable		$                1,700

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Formula:

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А в Sales return 200 Date Oct.3 Oct.11 Oct.17 Oct.21 Oct.23 Credit Sales 900 1200 5000 1700 2000 Net receivable |=D4-E4 =D5-E5 =D6-E6 =D7-E7 =D8-E8 Term 2/10, n/30 3/10, n/30 1/10, n/30 2/10, n/60 2/10, n/30 Date of Collection Discount Oct.8 =F4*2% Oct.16 =F5*3% Oct.29 Oct.27 =F7*2% Oct.28 =F8*2% Cash receipt after discount =F4-14 =F5-15 =F6-16 =F7-17 =F8-18 1000 200 300

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