On November 10 of the current year, Flores Mills sold carpet to a customer for $8,500 with credit terms 2/10, n/30. Flores uses the gross method of accounting for cash discounts.

1. What is the correct entry for Flores on November 10?

Multiple Choice:

A. Accounts receivable 8,500

Sales 8,500

B. Accounts receivable 8,330

Cash discounts 170

Sales 8,500

C. Accounts receivable 8,330

Sales 8,330

D. Accounts receivable 8,500

Cash discounts 170

Sales 8,330

Cash A/c Dr $8,330

Sales Discount A/c Dr $170

To Accounts receivable A/c $8,500

(Being cash received recorded)

Explanation:

The journal entry is shown below:

Cash A/c Dr $8,330

Sales Discount A/c Dr $170

To Accounts receivable A/c $8,500

(Being cash received recorded)

The discount would be

= Accounts receivable * percentage given

= 8,500 * 2%

= $170

And, The remaining amount would be debited to the cash account.

Note: This is the answer but the same is not provided in the given options