On July 2nd, Mills Wholesalers sells $3,150 of goods to Barnett Incorporated with terms 2/15, n/eom. On July 9th, Mills grants a sales allowance of $750 to Barnett. Journalize the cash entry for Mills if Barnett makes payment in full on July 9th.

Question

Business

Guest

10 June, 17:36

On July 2nd, Mills Wholesalers sells $3,150 of goods to Barnett Incorporated with terms 2/15, n/eom. On July 9th, Mills grants a sales allowance of $750 to Barnett. Journalize the cash entry for Mills if Barnett makes payment in full on July 9th.

+3

Answers (1)

Know the Answer?

Brennan Huerta · Answer 1

The journal entry is as follows:

Cash A/c Dr $2,352

Sales Discount A/c Dr $48

To Accounts receivable $2,400

(Being cash received recorded)

The computation of the account receivable

= Credit sales - sales allowance

= $3,150 - $750

= $2,400

And, the discount would be

= Accounts receivable * percentage given

= $2,400 * 2%

= $48

The remaining amount would be credited to the cash account.