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Window Help shool gold-soul la women's swi... shophearts Job Description Cloud Bing Yahoo Google Wikipedia Facebook Twitter Linkedin Connect #10 Saved Help Save &Exit; Submit Check my work Required information Exercise 7-5 Trade and cash discounts; the gross method and the net method compared [LO7-3] Tracy Company, a manufacturer of air conditioners, sold 100 units to Thomas Company on November 17, 2018. The units have a list price of S750 each, but Thomas was given terms of the sale were 3/10, n/30. a 20% trade discount. The Exercise 7-5 Part-2 3-a. Prepare the journal entries to record the sale on November 17 ignore cost of goods) and collection on 26,2018, assuming that the net method of accounting for cash discounts is used 3-b. Prepare the journal entries to record the sale on November 17 (ignore cost of 15, 2018, assuming that the net method of accounting for cash discounts is used goods) and collection on December Complete this question by entering your answers in the tabs below K Prev4 of 7Next

Explanation / Answer

Trade discount = 100 units * 750 * 20% = 15,000

Trade discounts doesn't form part of the accounting transaction.

Sales = (100 * 750) - 15,000 = 60,000

3-a.

3-b.

DATE PATICULARS AMOUNT AMOUNT November 17, 2018 Accounts Receivable [60,000-(60,000*3%)] 58,200 Sales 58,200 November 26, 2018 Cash 58,200 Accounts Receivable 58,200

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