Question

2. The following transactions were selected from October and November of ABC Company in 2020:
- Oct.20 Sold four goods to Peter, who charged the $600 sales amount on his credit card. The credit card
charges ABC Company a 2% credit card fee.
- Oct.25 Sold 15 items of merchandise to Paul for $15,000, terms 2/10, n/30.
- Oct.28 Sold 10 identical items of merchandise to Mary for $7,000; terms 2/10, n/30.
- Oct.30 Mary returned one of the items purchased on the 28th; the item was defective and credit was
given to the customer.
- Nov.6 Mary paid the account balance in full.
- Nov.30 Paul paid in full the amount due for the purchase on October 25, 2020.
Required: a) Prepare the journal entries for the transactions and b) assuming the sales discounts and credit card
discounts are treated as contra revenues, compute net sales for the two months ended November 30, 2020.

Answer 1

Sales