Question

Record the following transactions for Verbatim Company.

1.   On August 4, Verbatim sold merchandise on account to Reedy Company for $450, terms 2/10, n/30.

2.   On August 7, Verbatim granted Reedy a sales allowance and reduced the cost of the merchandise by $50 because some of the goods were slightly damaged.

3.   On August 12, Reedy paid the account in full.

Answer 1

Date	Account Titles and Explanations	Debit $	Credit $
Aug 4	Accounts receivable	$4,50
	Revenue		$4,50
	[ Entry to record sales made on account]
Aug 7	Sales returns	$50
	Accounts receivable		$50
	(Entry to record return on merchandise which is sold on account)
Aug 12	Cash a/c ($400*98/100)	$392
	Discount allowed($450-50)*2/100	$8
	Accounts receivable		$400
	[Being Cash received for the sale made on Aug 4]