Question

Record the following transactions on the books of Sheffield Corp. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a)On July 1, Sheffield Corp. sold merchandise on account to Waegelein Inc. for $18,300, terms 2/10, n/30. (b)On July 8, Waegelein Inc. returned merchandise worth $4,800 to Sheffield Corp.. (c)On July 11, Waegelein Inc. paid for the merchandise.

Answer 1

Sheffield Corp

A. Jul. 1

Dr Accounts Receivable - Maxfield Inc. 18,300

Cr Sales (To record sales on account ) 18,300

B. July 8

Dr Sales Returns and Allowances 4,800

Cr Accounts Receivable - Maxfield Inc. 3,800 (To record merchandise returned)

C. July 11

Dr Cash ($13,500 - $270) 13,230 Dr Sales Discounts ($13,500x .020) 270

Cr Accounts Receivable - Maxfield Inc. 13,500 (To record collection of accounts receivable)

Answer 2

On the date of sale:

Dr Account receivables $18,300

Cr Sales $18,300

On the 8th July:

Dr sales return $4,800

Cr Accounts receivable $4,800

On July 11:

Dr Cash $13,230

Dr Sales discount $270

Cr Accounts receivables $13,500

Step-by-step explanation:

The goods sold to Waegelein Inc would be recorded as sales as well as receivables since cash has not been received.

Upon return of goods worth $4800 the receivables account would be credited with $4,800 to indicate that the indebtedness of Waegelein has reduced by the amount of sales return .

Finally, the payment receipt is within the ten days discount period , hence the amount received is calculated as follows:

Sales $18,300

sales returns ($4,800)

Balance $13500

less discount

$13500*2% ($270)

Cash receipt $13,230