Sales and Sales Returns and Allowances Rubin Enterprises had the following sales

Question

Sales and Sales Returns and Allowances

Rubin Enterprises had the following sales-related transactions on a recent day:

A. List price of services provided on credit was $27,500; terms 2/10, n/30.

B. Collected $5,875 in cash for services to be provided in the future.

C. The customer complained about aspects of the services provided in Transaction a. To maintain a good relationship with this customer, Rubin granted an allowance of $1,500 off the list price. The customer had not yet paid for the services.

D. Rubin provided the services for the customer in Transaction b. Additionally, Rubin granted an allowance of $350 because the services were provided after the promised date. Because the customer had already paid, Rubin paid the $350 allowance in cash.

Prepare the necessary journal entry (or entries) for each of these transactions.

Account and Explanation

Debit

Credit

a.

Correct 6 of Item 1

Correct 7 of Item 1

Correct 8 of Item 1

Correct 9 of Item 1

Record sale

b.

Correct 12 of Item 1

Correct 13 of Item 1

Correct 14 of Item 1

Correct 15 of Item 1

Record collection of cash for future services

c.

Correct 18 of Item 1

Correct 19 of Item 1

Correct 20 of Item 1

Correct 21 of Item 1

Record allowance due to inadequate service being provided

d.

Correct 24 of Item 1

Correct 25 of Item 1

Correct 26 of Item 1

Correct 27 of Item 1

Record recognition of sales revenue

Correct 30 of Item 1

Correct 31 of Item 1

Correct 32 of Item 1

Correct 33 of Item 1

Record allowance for services which were performed late

Conceptual Connection: What concerns would Rubin have assuming that the sales allowances for this period were significantly higher than in previous periods both in absolute terms and as a percentage of gross sales?

The input in the box below will not be automatically graded, but may be reviewed and considered by your instructor.

Account and Explanation

Debit

Credit

a.

Correct 6 of Item 1

Correct 7 of Item 1

Correct 8 of Item 1

Correct 9 of Item 1

Record sale

b.

Correct 12 of Item 1

Correct 13 of Item 1

Correct 14 of Item 1

Correct 15 of Item 1

Record collection of cash for future services

c.

Correct 18 of Item 1

Correct 19 of Item 1

Correct 20 of Item 1

Correct 21 of Item 1

Record allowance due to inadequate service being provided

d.

Correct 24 of Item 1

Correct 25 of Item 1

Correct 26 of Item 1

Correct 27 of Item 1

Record recognition of sales revenue

Correct 30 of Item 1

Correct 31 of Item 1

Correct 32 of Item 1

Correct 33 of Item 1

Record allowance for services which were performed late

Conceptual Connection: What concerns would Rubin have assuming that the sales allowances for this period were significantly higher than in previous periods both in absolute terms and as a percentage of gross sales?

The input in the box below will not be automatically graded, but may be reviewed and considered by your instructor.

Explanation / Answer

A Account Receivable 27500 Service Income 27500 B Cash 5875 Unearned Income 5875 C Allowance 1500 Account Receivable 1500 D Unearned Income 5875 Service Income 5875 E Allowance 350 Cash 350

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