19.on May 8, wade, lnc. Sold merchandiseintheamount of$15.450 to Lincoln Company

Question

19.on May 8, wade, lnc. Sold merchandiseintheamount of$15.450 to Lincoln Company, with credit terms of 3/10, n/45, The cost of the items sold is $7,225. Wade uses the gross method of accounting for sales and a perpetual inventory system, Lincoln pays the invoice on May 13, and takes the appropriate discount. The journal entry that Wade makes on May 13 is: A. Cash 15,450 Accounts receivable 15,450 B. Cash 7,225 Accounts receivable 7,225 C. Cash 7,008.25 Sales discounts 216.75 Accounts receivable 7.225.00 D. Cash 14,986.50 Accounts receivable 14,986.50 E. Cash 14,986.50 Sales discounts 463.50 Accounts recelvable 15,450

Explanation / Answer

E.        Cash                                      $14,986.5
           Sale discount                        $463.5
                  Accounts receivable                     $15,450

Explanation:-
Sale discount = $15,450 × 3% = $463.5
Cash = $15,450 - $463.5 =$14,986.5

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