Question

On september 12, ryan company sold merchandise in the amount of $5,800 to johnson company, with credit terms of 2/10, n/30. the cost of the items sold is $4,000. ryan uses the periodic inventory system and the net method of accounting for sales. johnson pays the invoice on september 18, and takes the appropriate discount. the journal entry that ryan makes on september 18 is

Answer 1

Answer:

The journal entry to be made by Ryan on September 18 is shown below:

Explanation:

The journal entry to be made by Ryan on September 18 is as:

Cash A/c............................................Dr  $5,194

Sales Discount A/c...........................Dr  $106

                 Accounts Receivable A/c..........Cr  $5,300

Remaining Goods worth = Goods worth - Returned goods

= $5,800 - $500

Remaining goods worth = $5,300

And the payment is made within the duration of discount, so the 2% discount will be provided.

Therefore, discount would be:

Discount = $5,300 × 2%

Discount = $106

Note: In the question, the information is missing which is that $500 worth goods were returned that costs $350.