Question

Required information Problem 5-2B Record transactions related to credit sales and contra revenues (LO5-1, 5-2) [The following information applies to the questions displayed below. Data Recovery Services (DRS) specializes in data recovery from crashed hard drives. The price charged varies based on the extent of damage and the amount of data being recovered. DRS offers a 20% discount to students and faculty at educational institutions. Consider the following transactions during the month of June. June 10 Rashid's hard drive crashes and he sends it to DRS. June 12 After initial evaluation, DRS e-mails Rashid to let him know that full data recovery will cost $1,500. June 13 Rashid informe DRS that he would like them to recover the data and that he is a student at UCLA, qualifying him for a 200 educational discount and reducing the cost by $300 ( - $1,500 * 208). June 16 DRS performs the work and claims to be successful in recovering all data. DRS asks Rashid to pay within 30 days of today's date, offering a 30 discount for payment within 10 days. June 19 When Rashid receives the hard drive, he notices that DRS did not successfully recover all data. Approximately 251 of the data has not been recovered and he informs DRS. June 20 DRS reduces the amount Rashid oves by 258. June 30 Rashid pays the amount owed.

Answer 1

Answer (1)

Date	Accounts & Explanation	Debit	Credit
June 10	No Journal Entry required
June 12	No Journal Entry required
June 13	No Journal Entry required
June 16	Account Receivables [1500-300]	1200
	Service Revenue		1200
June 19	No Journal Entry required
June 20	Sales Allowances [1200*25/100]	300
	Account Receivables		300
June 30	Cash [1200-300]	900
	Account Receivables		900

Net revenue if rashid had paid his bill on 25th june = Net revenue - 3% discount = 900 - [3/100*900] = 873

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