Question

Sales-related transactions

Sayers Co. sold merchandise on account to a customer for $87,000 terms 1/10, n/30. The cost of the goods sold was $64,000.

a. Journalize Sayers’ entries to record the sale.

	Accounts Receivable Accounts Payable Accounts Receivable Cash Interest Expense Sales
	Sales Accounts Payable Accounts Receivable Cash Interest Expense Sales
	Cost of Goods Sold Accounts Payable Cash Cost of Goods Sold Interest Expense Inventory
	Inventory Accounts Payable Cash Cost of Goods Sold Interest Expense Inventory

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Partially correct

b. Journalize the receipt of payment within the discount period.

	Cash Accounts Receivable Cash Cost of Goods Sold Inventory Sales
	Accounts Receivable Accounts Receivable Cash Cost of Goods Sold Inventory Sales

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Partially correct

c. Journalize the entry to record the receipt of payment beyond the discount period of ten days.

	Cash Accounts Receivable Cash Cost of Goods Sold Inventory Sales
	Accounts Receivable Accounts Receivable Cash Cost of Goods Sold Interest Expense Inventory
	Sales Cash Cost of Goods Sold Interest Revenue Inventory Sales

Answer 1

(a).

Accounts Title & Explanation	Debit	Credit
Accounts Receivable	$87000
Sales		$87000
(For recording sales on account)
Cost of Goods Sold	$64000
Inventory		$64000
(For recording cost of goods sold)

(b).

Accounts Title & Explanation	Debit	Credit
Cash	$86130
Discount Allowed	$870
Account Receivable		$87000
(For recording amount received within discount period)

(c).

Accounts Title & Explanation	Debit	Credit
Cash	$87000
Account Receivable		$87000
(For recording amount received beyond discount period)