Question

Required information (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. bila Rashid to let 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 $1,800. June 13 Rashid informs DRS that he would like them to recover the data and that he is a student at UCLA, qualifying him for a 20% educational discount and reducing the cost by $360 ( = $1,800 * 20%). 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 3% 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 25% of the data has not been recovered and he informs DRS. June 20 DRS reduces the amount Rashid owes by 25%. June 30 Rashid pays the amount owed. Required: 1. Record the necessary transaction(s) for Data Recovery Services on each date. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

	Date	General Journal	Debit	Credit
1	June 10	No Journal entry required
2	June 12	No Journal entry required
3	June 13	No Journal entry required
4	June 16	Accounts Receivable	1440		=1800-360
		Service revenue		1440
5	June 19	No Journal entry required
6	June 20	Sales Allowances	360		=1440*25%
		Accounts Receivable		360
7	June 30	Cash	1080		=1440-360
		Accounts Receivable		1080