SALES AND PURCHASE DISCOUNTS: GROSS AND NET METHODS. Sims Company regularly sells merchandise to Lauber Supply on terms 3/15, n/20. 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:

1. Assume that Sims and Lauber both record transactions gross. Prepare journal entries for both Sims and Lauber for these four transactions in parallel columns, as illustrated below:

2. Assume that Sims records the sales transactions net of discounts. Assume that Lauber records the purchase transactions net of discounts. Prepare journal entries for both Sims and Lauber for these four transactions in parallel columns, as illustrated above. lol

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Sims Accounts Receivable Sales Revenue Lauber XXX Purchases XXX XXX Accounts Payable XXX