Jupiter Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2022. The
Question:
Jupiter Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2022. The goods have a sales price of $610,000 (cost of $500,000). The terms are net 30. If Danone pays within 5 days, however, it receives a cash discount of $10,000. Past history indicates that the cash discount will be taken. On January 28, 2022, Danone makes payment to Jupiter for the full sales price.
Instructions
a. Prepare the journal entry or entries to record the sale and related cost of goods sold for Jupiter Company on January 2, 2022, and the payment on January 28, 2022. Assume that Jupiter Company records the January 2, 2022, transaction using the net method.
b. Prepare the journal entry or entries to record the sale and related cost of goods sold for Jupiter Company on January 2, 2022, and the payment on January 28, 2022. Assume that Jupiter Company records the January 2, 2022, transaction using the gross method.
Step by Step Answer:
Intermediate Accounting IFRS
ISBN: 9781119607519
4th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield