Question

On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with credit terms 2/10, n/30. Flores uses the gross method of accounting for sales discounts. What is the correct entry for Flores on November 10?

Answer 1

Answer:

Explanation:

Dr Accounts receivable 7,840 [(1-0.02)*8000]

     Cr Sales                    7,840

Dr Accounts receivable 8,000  

     Cr Sales                     8,000

Dr Accounts receivable 7,840  

     Cr    Sales discounts 160  [0.02*8000]

     Cr Sales                  8,000

Dr Accounts receivable 8,000  

     Cr Sales discounts  160

     Cr Sales                   7,840