Presented below are selected transactions of Pale Force Company. Pale Force sell

Question

Presented below are selected transactions of Pale Force Company. Pale Force sells in large quantities to other companies and also sells its product in a small retail outlet.

March 1 Sold merchandise on account to CC Company for $3,000, terms 2/10, n/30.
March 3 CC Company returned merchandise worth $500 to Pale Force.
March 9 Pale Force collected the amount due from CC Company from the March 1 sale.
March 15 Pale Force sold merchandise for $400 in its retail outlet. The customer used his Pale Force credit card.
March 31 Pale Force added 1.5% monthly interest to the customer's credit card balance.


Instructions

Prepare journal entries for the transactions above. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)

Explanation / Answer

March 1 Sold merchandise on account to CC Company for $3,000, terms 2/10, n/30. Dr Accounts receivable $3,000 Cr Sales $3,000 March 3 CC Company returned merchandise worth $500 to Pale Force. Dr Sales returns and allowances $500 Cr AR $500 March 9 Pale Force collected the amount due from CC Company from the March 1 sale. Dr Cash 2,450 Dr Sales discounts $50 Cr AR $2,500 Since the amt was paid within 10 days, 2% discount was given March 15 Pale Force sold merchandise for $400 in its retail outlet. The customer used his Pale Force credit card. Dr AR $400 Cr Sales $400 March 31 Pale Force added 1.5% monthly interest to the customer's credit card balance. Dr Interest receivable $3 Cr Interest revenue $3 For simplicity sake, I took half a month, so $400 x 1.5% x 1/2

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.