Presented below is information from Perez Computers Incorporated. Sold $20,000 of computers to Robertson Company with terms 3/15, n/60. Perez uses the gross method to record cash discounts. Perez received payment from Robertson for the full amount owed from the July transactions. Sold $200,000 in computers and peripherals to The Clark Store with terms of 2/10, n/30. The Clark Store paid Perez for its purchase of July 17. Prepare the necessary journal entries for Perez Computers.

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21 January, 10:41

Presented below is information from Perez Computers Incorporated. Sold $20,000 of computers to Robertson Company with terms 3/15, n/60. Perez uses the gross method to record cash discounts. Perez received payment from Robertson for the full amount owed from the July transactions. Sold $200,000 in computers and peripherals to The Clark Store with terms of 2/10, n/30. The Clark Store paid Perez for its purchase of July 17. Prepare the necessary journal entries for Perez Computers.

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Preston Snyder · Answer 1

Dr Accounts receivable $20,000

Cr Sales $20,000

Dr cash $19,400

Dr sales discount $600

Cr accounts receivable $20,000

Dr Accounts receivable $200,000

Cr sales $200,000

Dr cash $196,000

Dr sales discount $4,000

Cr accounts receivable $200,000

Explanation:

Perez uses gross method of recording discount. Which means, there is no sales discount recognition unless the customer availed it. During the sales for the month of July, Perez' customers availed the discount and paid on the date within which specific discount is given. Upon payment of the customers, Perez' should recognize the sales discount in the amount of $600 for Robertson and $4,000 for Clark Store.