Question

Record the following transactions on the books of Splish Brothers Inc.a. On July 1, Splish Brothers Inc. sold merchandise on account to Waegelein Inc. for $16,100, terms 2/10, n/30. b. On July 8, Waegelein Inc. returned merchandise worth $4,900 to Splish Brothers Inc.c. On July 11, Waegelein Inc. paid for the merchandise.

Answer 1

Answer and Explanation:

The Journal entries are shown below:-

1. Accounts Receivable Dr, $16,100

To Sales $16,100

(Being sales is recorded)

2. Sales Returns and Allowances Dr, $4,900

To Accounts Receivable $4,900

(Being return of the merchandise is recorded)

3. Cash Dr, $10,976 ($16,100 - $4,900) × 98%

Sales Discounts Dr, $224 ($16,100 - $4,900) × 2%

To Accounts Receivable $11,200 ($16,100 - $4,900)

(Being cash collection on the account is recorded)