Question

Sheridan Co. uses the gross method to record sales made on credit. On June 1, 2020, it made sales of $55,000 with terms 4/15, n/45. On June 12, 2020, Sheridan received full payment for the June 1 sale.

Prepare the required journal entries for Sheridan Co. (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. Record journal entries in the order presented in the problem.)

Indigo Co. uses the net method to account for cash discounts. On June 1, 2020, it made sales of $60,100 with terms 3/15, n/45. On June 12, 2020, Indigo received full payment for the June 1 sale.

Prepare the required journal entries for Indigo Co. (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. Record journal entries in the order presented in the problem.)

Answer 1

Solution 1:

Journal Entries - Sheridan Co
Date	Particulars	Debit	Credit
1-Jun	Accounts receivables Dr	$55,000.00
	To Sales revenue		$55,000.00
	(To record sales on account)
12-Jun	Cash Dr	$52,800.00
	Sales discount Dr	$2,200.00
	To Accounts receivables		$55,000.00
	(To record collection from customer)

Solution 2:

Journal Entries - Indigo Co
Date	Particulars	Debit	Credit
1-Jun	Accounts receivables Dr	$58,297.00
	To Sales revenue		$58,297.00
	(To record sales on account)
12-Jun	Cash Dr	$58,297.00
	To Accounts receivables		$58,297.00
	(To record collection from customer)