Question

Record the following transactions on the books of RAS Co.

(a) On July 1, Cullumber Co. sold merchandise on account to Waegelein Inc. for $15,300, terms 2/10, n/30.
(b) On July 8, Waegelein Inc. returned merchandise worth $3,500 to Cullumber Co.
(c) On July 11, Waegelein Inc. paid for the merchandise.

Answer 1

July 1

Trade Receivable - Waegelein Inc $15,300 (debit)

Revenue $15,300 (credit)

July 8

Revenue $3,500 (debit)

Trade Receivable - Waegelein Inc $3,500 (credit)

July 1 1

J1

Discount Allowed $236 (debit)

Trade Receivable - Waegelein Inc $236 (credit)

J2

Cash $11,564 (debit)

Trade Receivable - Waegelein Inc $11,564 (credit)

Step-by-step explanation:

July 1

Recognise Revenue and Asset -Trade Receivable

July 8

De-recognise Revenue and de-recognise asset -Trade Receivable

July 1

Payment is within the range of discount period of 10 days

J1

Recognise Discount Allowed Expense and De-recognise the Asset -Trade Receivable

J2

Recognise the Cash on receipt of payment less discount allowed and de-recognise Asset -Trade Receivable