EFFECTS OF DISCOUNTS ON SALES AND PURCHASES Helmkamp Products sells golf clubs and accessories to pro shops. Gross sales in 2009 were $1,150,200 (Helmkamp’s list price) on terms 3/15, n/45. Customers paid for

$822,800 (Helmkamp’s list price) of the merchandise within the discount period and the remaining $327,400 after the end of the discount period. Helmkamp records purchases and sales using the gross method to account for sales discounts.

Required:

. Compute the amount of net sales.

. Determine how much cash was collected from sales.

problem 5-65A SALES DISCOUNTS Sims Company regularly sells merchandise to Lauber Supply on terms 3/15, n/20 and records sales at gross. During a recent month, the two firms engaged in the following transactions:

a. Sims sold merchandise with a list price of $33,000.

b. Sims sold merchandise with a list price of $48,000.

c. Lauber paid for the purchase in transaction a within the discount period.

d. Lauber paid for the purchase in transaction b after the discount period.

Required:

. Provide the journal entries for Sims to record the sales in a and b.

. Provide the journal entry to record Lauber’s payment in c.

. Provide the journal entry to record Lauber’s payment in d.