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1 June, 19:12

Merry Maidens Cleaning generally charges $120 for a detailed cleaning of a normal-size home. However, to generate additional business, Merry Maidens is offering a new-customer discount of 10%. On May 1, Ms. E. Pearson has Merry Maidens clean her house and pays cash equal to the discounted price.

Required:

Record the revenue earned by Merry Maidens Cleaning on May 1.

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Answers (1)
  1. 1 June, 21:48
    0
    New price = $108

    Explanation:

    Given:

    Old price for cleaning = $120

    New discount rate = 10% = 10 / 100 = 0.1

    Computation of new price for cleaning:

    New price = Old price for cleaning (1-New discount rate)

    New price = 120 (1-0.1)

    New price = 120 (1-0.1)

    New price = $108

    Journal entry

    Date Account Title and Explanation Debit Credit

    Cash A/c Dr. $108

    Service Revenue A/c $108

    (Being amount received from cleaning)
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