Question

On June 3, Sheridan Company sold to Chester Company merchandise having a sale price of $5,600 with terms of 2/10,n/60, fo.b. shipping point. An invoice totaling $93, terms 1/30, was received by Chester on June 8 from John Booth Transport Service for the freight cost. On June 12, the company received a check for the balance due from Chester Company. (a) Prepare journal entries on the Sheridan Company books to record all the events noted above under each of the following bases. (1) (2) Sales and receivables are entered at gross selling price. Sales and receivables are entered at net of cash discounts. (If no entry is required, select "No Entry" for the account titles and enter for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Date Account Titles and Explanation Debit (1) Cred June 12

Answer 1

Answer to 1 Date credit bebit Accounts El explanations Accounts receivasles-chester 5600 June 3 Sales revenue 5600 (Being sales to Chester in terms of 2/10 het 30) Tune Banie 5488 cash Discount 112 5600 Accounts receivables- Chester Being Cheque Cheur received from chester company after allowing discount @20%). ANISWER TO 2 Desit pare June 3 Accounts to explanations Account heceivables - Chester reellt 5488 Sales revenue (Being sold to chester company) 5488 1 Inne Banc 5488 Altoonts jueceivable chester (Being check collected from chessar) 5488

worlding nole 2/10 n/30 means normal collechon period is 30 days 1 but ay discount if settled with in 10 days. Gene lo dary days so Chester Company made payment with in eligible for discount. Distount 5600 x 2% S60o - 112 payment to be made by Chepter $5488