Question

Presented below is information from Bramble Computers Incorporated. July 1Sold $20,000 of computers to Robertson Company with terms 3/15, n/60. Bramble uses the gross method to record cash discounts. Bramble estimates allowances of $1,300 will be honored on these sales. 10Bramble received payment from Robertson for the full amount owed from the July transactions. 17Sold $200,000 in computers and peripherals to The Clark Store with terms of 2/10, n/30. 30The Clark Store paid Bramble for its purchase of July 17.

Prepare the necessary journal entries for Perez Computers.

Answer 1

Answer and Explanation:

The journal entries are shown below:

On July 1

Account receivable $20,000

To Sales revenue $20,000

(Being sales is recorded)

Sales return and allowance $1,300

To Allowance for sales returns and allowance $1,300

(Being the estimation of the sales return is recorded)

On July 1

Cash ($20,000 × 97%) $19,400

Sales discount $600

To Account receivable $20,000

(being cash is recorded)

On July 17

Account receivable $200,000

To Sales revenue $200,000

(Being account receivable is recorded)

On July 30

Cash $200,000

To Account receivable $200,000

(Being cash is recorded)