Question

On June 3, Pina Company sold to Chester Company merchandise having a sale price of $4,600...

On June 3, Pina Company sold to Chester Company merchandise having a sale price of $4,600 with terms of 2/10, n/60, f.o.b. shipping point. An invoice totaling $93, 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) Sales and receivables are entered at gross selling price.
(2) Sales and receivables are entered at net of cash discounts.


(If no entry is required, select "No Entry" for the account titles and enter 0 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
Credit
(1)

June 3
June 12
June 12
(2)

June 3
June 12

June 3
June 12

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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 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date
Account Titles and Explanation
Debit
Credit
July 29

Homework Answers

Answer #1
1
3-Jun Accounts Receivable-Chester 4600
              Sales 4600
12-Jun Cash 4508
Sales Discounts 92 =4600*2%
          Accounts Receivable-Chester 4600
2
3-Jun Accounts Receivable-Chester 4508
              Sales 4508
12-Jun Cash 4508
          Accounts Receivable-Chester 4508
3
29-Jul Cash 4600
          Accounts Receivable-Chester 4508
         Sales Discount Forfeited 92
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