Question

the guardian Gift shop (GGS) started in 2018, GGS experienced the following transactions:
1) April 1 - Purchased $12,000 of merchandise on account under terms 2/10, n/30
2) April 3 - Returned $1,500 of goods purchased in event 1
3) April 5 - Paid the balance due on Accounts Payable within the discount period
4) April 20 - The company recognized $18,000 of cash revenue from the sale of the merchandise purchased above.

A) record the jornal entry for transactiom above:

Account TItle	Debit	Credit

B) refer to the information above Calculate the net cash flow from operating activies.

Answer 1

Solution: A)

Date	Account Title	Debit	Credit
April 1	Purchases Dr.	12,000
	To Accounts payable		12,000
April 3	Purchase return Dr	1,500
	To Accounts payable		1,500
April 5	Accounts payable Dr	10,500
	To Cash		10,290
	To Discount recieved		210
April 20	Cash Dr	18,000
	To sales revenue		18,000

B)

cash revenue from the sale	18,000
Less: payment to creditors	10,290
net cash flow from operating activies	$7,710