Ask Question
4 June, 07:55

Landon jewelers uses the perpetual inventory system. on april 2, landon sold merchandise with a cost of $2,500 for $7,000 to a customer on account with terms of 3/15, n/30. the journal entry to record the cost of goods sold would be:

+3
Answers (1)
  1. 4 June, 08:25
    0
    Dr Cash $6,790

    Dr Sales discount $210

    Cr Accounts Receivable $7,000

    Explanation:

    Cost of goods sold by Landon Jewelers is $7,000

    The cost is subject to 3/15, n/30 meaning that 3% will discount will be applicable if payment is made in 15 days. Where the balance is not paid within 15 days, it must however be paid within 30 days.

    Since payment was made to Landon Jewelers within the 15 days grace, 3% deduction will be applicable to the payment.

    Therefore Sales discount would be;

    = $7,000 * 3%

    =$210

    Balance paid in cash would be;

    =$7,000 - $210

    =$6,790

    Journal entry for cost of goods sold would be;

    Dr Cash $6,790

    Dr Sales discount $210

    Cr Accounts Receivable $7,000

    Sales discount is an expense hence debited while the whole amount is credited to accounts receivable.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Landon jewelers uses the perpetual inventory system. on april 2, landon sold merchandise with a cost of $2,500 for $7,000 to a customer on ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers