Question

On March 1, Lincoln sold merchandise on account to Amelia Company for $27,300, terms 1/10, net 45. On March 6, Amelia returns merchandise with a sales price of $3,000. On March 11, Lincoln receives payment from Amelia for the balance due. Prepare journal entries to record the March transactions on Lincoln’s books. (You may ignore cost of goods sold entries and explanations.

Answer 1

Step-by-step explanation:

The journal entries are shown below:

Accounts receivable A/c Dr $27,300

To Sales A/c $27,300

(Being goods are sold on credit)

Sales return and allowance A/c Dr $3,000

To Accounts receivable $3,000

(Being sales return is recorded)

Cash A/c Dr $24,057

Sales Discount A/c Dr $243

To Accounts receivable $24,300

(Being cash received recorded)

The computation of the account receivable

= Credit sales - returned goods

= $27,300 - $3,000

= $24,300

And, the discount would be

= Accounts receivable × percentage given

= $24,300 × 1%

= $243

The remaining amount would be credited to the cash account.