Sheridan Company sells goods to Danone Inc. by accepting a note receivable on Ja

Question

Sheridan Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2017. The goods have a sales price of $590,100 (cost of $460,000). The terms are net 30. If Danone pays within 5 days, however, it receives a cash discount of $10,100. Past history indicates that the cash discount will be taken. On January 2B, 2017, Danone makes payment to Sheridan for the full sales price. Prepare the journal entry(ies) to record the sale and related cost of goods sold for Sheridan Company on January 2 2017, and the payment on January 28, 2017. Assume that Sheridan Company records the using the net method. (Credit account titles are automatically indented when the amount is e indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Date (To record sales) (To record cost of goods sold)

Explanation / Answer

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Net Method Date Particulars Debit Credit 2-Jan Notes Receivable $ 580,000.00 Sales Revenue $ 580,000.00 (to record sales revenue) 2-Jan Cost of Goods Sold $ 460,000.00 Inventory $ 460,000.00 (to record COGS) 28-Jan Cash $ 590,100.00 Notes Receivable $ 580,000.00 Discount Forfiet $    10,100.00 (to record cash received) Gross Method 2-Jan Notes Receivable $ 590,100.00 Sales Revenue $ 590,100.00 (to record sales revenue) 2-Jan Cost of Goods Sold $ 460,000.00 Inventory $ 460,000.00 (to record COGS) 28-Jan Cash $ 590,100.00 Notes Receivable $ 590,100.00 (to record cash received)

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