Question

On June 3, Pina Company sold to Chester Company merchandise having a sale price of $3,300 with terms of 2/10, n/60, f.o.b. shipping point. An invoice totaling $94, terms n/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. Prepare journal entries on the Pina 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 Ofor the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit une 12 > e Textbook and Media List of Accounts Prepare the journal entry under basis 2, assuming that Chester Company did not remit payment until July 29. (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.) Debit Credit Date Account Titles and Explanation July 29

Answer 1

Journal entries under base 1:-

When sales and receivable are entered at gross selling price

Date	Accounts titles	Debit $	Credit $
June 3	Account receivable	3300
	Sales		3300
June12	Cash	3234
	Sales discounts(2℅ of $3300)	66
	Account receivable		3300

When sales and receivable are entered at net cash discounts

Date	Accounts titles	Debit $	Credit $
June 3	Accounts receivables	3234
	Sales($3300 X 98℅)		3234
June12	Cash	3234
	Accounts receivables		3234

Journal entry under base 2 when company did not received payment until july 29

Date	Accounts	Debit $	Credit $
June 29	Cash	3300
	Accounts receivable		3234
	Sales discount		66