CALCULATOR FULL SCREEN PRINTER VERSION BACK Exercise 7-5 On June 3, Larkspur Com

Question

CALCULATOR FULL SCREEN PRINTER VERSION BACK Exercise 7-5 On June 3, Larkspur Company sold to Chester Company merchandise having a sale price of $5,600 with terms of 2/10, n/60, f.o.b. shipping point. An invoice totaling $93, terms n/30, was received by Chester on June 8 from John Booth Transport Service for the freight cost. On June 12, the company received a check for the balance due from Chester Company. Prepare journal entries on the Larkspur Company books to record all the events noted above under each of the following bases. (1) Sales and receivables are entered at gross selling price. (2) Sales and receivables are entered at net of cash discounts. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Date Account Titles and Explanation Debit Credit June 12

Explanation / Answer

No Date Account titles & explanations Debit Credit 1) 3-Jun Accounts receivable 5,600 sales 5,600 12-Jun Cash 5488 sales discount (5600*2%) 112 accounts receivable 5600 2) 3-Jun Accounts receivable 5,488 sales 5,488 12-Jun Cash 5,488 accounts receivable 5,488 juy 29 Cash 5,600 sales discount forfeited 112 accounts receivable 5,488

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