On November 10 of the current year, Flores Mills sold carpet to a customer for $9,000 with credit terms 4/10, n/30. Flores uses the gross method of accounting for cash discounts. What is the correct entry for Flores on November 17, assuming the correct payment was received on that date

Dr cash $8,640

Dr sales discount $360

Cr accounts receivable $9,000

Explanation:

First and foremost, it is noteworthy that receiving payment on 17 November means that customer paid within the stipulated discount period of ten days, hence entitled to a 4% discount off the purchase price.

Cash received=$9,000 * (1-4%) = $ 8,640.00

Discount allowed=$9,000-$ 8,640=$360

As a result of the above computations, the cash account would be debited with $8,640 while sales discount is debited with $360.

The accounts receivable is debited with the full purchase price of $9,000