Question

Presented below is information from Headland Computers Incorporated.

July 1 Sold $22,600 of computers to Robertson Company with terms 3/15, n/60. Headland uses the gross method to record cash discounts. Headland estimates allowances of $1,334 will be honored on these sales.
10 Headland received payment from Robertson for the full amount owed from the July transactions.
17 Sold $256,100 in computers and peripherals to The Clark Store with terms of 2/10, n/30.
30 The Clark Store paid Headland for its purchase of July 17.

Answer 1

July 1

Dr Accounts receivable $22,600

Cr Cash $22,600

Dr Sales returns and allowances $1,334

Cr Allowances for Sales returns and allowances $1,334

July 10

Dr Cash $21,922

Dr Sales Discount $678

Cr Accounts Receivable $22,600

July 17

Dr Accounts receivable $256,100

Cr Sales revenue $256,100

July 30

Dr Cash $256,100

Cr Accounts receivable $256,100

Step-by-step explanation:

Preparation of Journal entry

July 1

Dr Accounts receivable $22,600

Cr Cash $22,600

Dr Sales returns and allowances $1,334

Cr Allowances for Sales returns and allowances $1,334

July 10

Dr Cash $21,922

(97%×$22,600)

Dr Sales Discount $678

(3%×$22,600)

Cr Accounts Receivable $22,600

($21,922+$678)

July 17

Dr Accounts receivable $256,100

Cr Sales revenue $256,100

July 30

Dr Cash $256,100

Cr Accounts receivable $256,100