Question

On April 25, Foreman Electric installs wiring in a new home for $2,800 on account. However, on April 27, Foreman’s electrical work does not pass inspection, and Foreman grants the customer an allowance of $530 because of the problem. The customer makes full payment of the balance owed, excluding the allowance, on April 30.
Required:
1. Record the credit sale on April 25.
2. Record the sales allowance on April 27.
3. Record the cash collection on April 30.
4. Calculate net sales associated with these transactions.

Answer 1

Answer:

1. April 25

Dr Accounts receivable 2,800

Cr Service revenue 2,800

2. April 27

Dr Sales allowances 530

Cr Accounts receivable 530

3.April 30

Dr Cash 2,270

Cr Accounts receivable 2,270

4. Net sales $2,270

Explanation:

1. Preparation to record the credit sale on April 25 for Foreman Electric because Foreman Electric installs wiring in a new home for $2,800 on account which means to record service provide on account by :

April 25

Dr Accounts receivable 2,800

Cr Service revenue 2,800

2. Preparation to record the sales allowance on April 27 because  Foreman was said to grants the customer an allowance of $530 which means we have tobrecord sales allowances for credit sales by :

April 27

Dr Sales allowances 530

Cr Accounts receivable 530

3. Preparation to  record the cash collection on April 30 because the customer makes the full payment of the balance owed which exclude the allowance, on April 30 which means we have to  record collected cash on account less the sales allowance .

April 30

Dr Cash 2,270

(2,800-530)

Cr Accounts receivable 2,270

4.Calculation of the net sales associated with these transactions

Service revenue  2,800

Les sales allowances 530

Net sales $2,270

Answer 2

First, April 25

The entry is Dr. assets 2,800

Cr Service revenue 2,800

The second, April 27

Dr. Sales allowances 530

Cr assets 530

The third, April 30

Dr. Cash 2,270

Cr assets 2,270

The forth, income is $2,270

What are the Journal Transaction?

1. Maintain the record for Preparation the credit sale on April 25 for Foreman Electric because Foreman Electric installs wiring in an exceedingly new home for $2,800 on account which suggests to record service provide on account by :

April 25

Dr assets 2,800

Cr Service revenue 2,800

2. Maintain the record for Preparation the sales allowance on April 27 because Foreman was said to grants the purchasers an allowance of $530 which suggests we've to record sales allowances for credit sales by :

April 27

Dr. Sales allowances 530

Cr assets 530

3. Maintain the record for Preparation the cash collection on April 30 because the customer makes the entire payment of the balance owed which excludes the allowance, on April 30 which suggests we have got to record collected cash on account less the sales allowance.

April 30

Dr Cash 2,270

(2,800-530)

Cr assets 2,270

4. Now we Calculate of the net sales associated with these transactions

Service revenue 2,800

Fewer sales allowances 530

Thus the online sales are $2,270

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