Final answer:
To record the sale and collection using the gross method, the journal entries would be different from using the net method. The gross method records sales at the full list price and recognizes the discount as a contra-revenue account, while the net method records sales at the net amount after deducting the discount. The collection entries would also differ based on the method used.
Step-by-step explanation:
To answer the given requirements, we need to understand the gross method and the net method of accounting for cash discounts. The gross method records sales at the full list price and recognizes the discount as a contra-revenue account. The net method records sales at the net amount after deducting the discount.
1. Journal entries using the gross method:
November 17, 2024:
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- Accounts Receivable - Thomas Company: $60,000 (100 units x $600)
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- Sales: $60,000
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- Sales Discount: $18,000 (30% of $60,000)
November 26, 2024 (collection):
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- Cash: $43,200 ($60,000 - $18,000)
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- Accounts Receivable - Thomas Company: $43,200
2. Journal entries using the gross method:
November 17, 2024:
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- Accounts Receivable - Thomas Company: $60,000
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- Sales: $60,000
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- Sales Discount: $18,000
December 15, 2024 (collection):
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- Cash: $42,000 ($60,000 - $18,000)
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- Accounts Receivable - Thomas Company: $42,000
3. Journal entries using the net method:
November 17, 2024:
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- Accounts Receivable - Thomas Company: $42,000 (net amount after deducting discount)
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- Sales Revenue: $42,000 (net amount after deducting discount)
November 26, 2024 (collection):
-
- Cash: $42,000
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- Accounts Receivable - Thomas Company: $42,000
4. Journal entries using the net method:
November 17, 2024:
-
- Accounts Receivable - Thomas Company: $42,000 (net amount after deducting discount)
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- Sales Revenue: $42,000 (net amount after deducting discount)
December 15, 2024 (collection):
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- Cash: $42,000
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- Accounts Receivable - Thomas Company: $42,000