On September 12, Vander Company, Inc. sold merchandise in the amount of $5,800 t

Question

On September 12, Vander Company, Inc. sold merchandise in the amount of $5,800 to Jepson Company on credit with terms of 2/10, n/30. The cost of the items sold is $4,000. Vander uses the gross method of accounting for sales and a periodic inventory system. On September 14, Jepson returns some of the merchandise. The selling price of the merchandise is $500 and the cost of the merchandise returned is $350. Jepson pays the invoice on September 18 and takes the appropriate discount. The journal entry that Vander makes on September 18 is:

Cash 5,684 Sales discounts 116 Accounts receivable 5,800

Explanation / Answer

The journal entries made earlier would be:

Hence the journal entry for September 18 will be:

Date Account Debit Credit Sep. 12 Accounts receivable 5800 Sales revenue 5800 (To record sales on account) Sep. 14 Sales returns and allowances 500 Accounts receivable 500 (To record sales returns)

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