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7 February, 11:07

Sampson Co. sold merchandise to Batson Co. on account, $36,900, terms 2/15, net 45. The cost of the merchandise sold is $27,675. Batson Co. paid the invoice within the discount period. Assume both Sampson and Batson use a perpetual inventory system. Prepare the entries that Sampson Co. would record for the information above.

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  1. 7 February, 12:14
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    The journal entries are shown below:

    Accounts receivable A/c Dr $36,900

    To Sales A/c $36,900

    (Being merchandise is sold on credit basis)

    Cost of goods sold A/c Dr $27,675

    To Merchandise inventory A/c $27,675

    (Being merchandise is sold at cost is recorded)

    Cash A/c Dr $36,162

    Sales Discount A/c Dr $738

    To Accounts receivable $36,900

    (Being cash received recorded)

    The computation of the discount would be

    = Accounts receivable * percentage given

    = $36,900 * 2%

    = $738

    The remaining amount would be credited to the cash account.
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