Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

17. On June 30,2020, Chelsea Inc, sold merchandise for $1,500 on credit terms 2/10, n/30. Chelsea accounts for sales discounts using the net method. The

image text in transcribed
17. On June 30,2020, Chelsea Inc, sold merchandise for $1,500 on credit terms 2/10, n/30. Chelsea accounts for sales discounts using the net method. The customer paid the balance fin full on July 28 , 2020. Choose the correct statement which describes Chelsea's accounting for this transaction. A). On June 30. Cholsea would debit Accounts Receivable for $1,500. B) On July 28, Chelsea would credit sales for $30. C) On July 28, the net impact of the journal entry would be to increase assets by $30 and increase equity by $30 (D) After all of the entries, net sales would be recognized for $1,500. E) None of the above. 18. Five Hands Inc, sells merchandise for $50,000 for the month of June. The company estimates returns to be equal to 2.5% of sales. Actual returns for the month for items sold in June totaled $500. What is the correct balance in Refund Liability on June 30 based on these transactions? A) $20 B) $1,250 C) $750 D) $500 19. Six Sisters Inc. Sells merchandise for $480,000 with a cost of $216,000 in the month of June. The company estimates returns to be equal to 3% of sales. Actual returns for the month for items sold in June totaled $10,000. The unadjusted credit balance in Refund Llability on June 30 is $2,400 and the unadjusted debit balance in Inventory-Estimated Returns is $1,080. What is included as part of the entries to estimate returns at month-end? A) A debit to Sales Returns for $4,400. B) A debit to Inventory-Estimated Returns for $1,980. C) A debit to Cost of Goods Sold for $900. D) A credit to Refund Liability for $2,000. 20. When the allowance method of recognizing doubtful accounts is used, the entrics to record collection of a small account previously written off would (a) Increase the allowance for doubtful accounts. B) Increase net incomo. C) Decrease the allowance for doubtful accounts. D) Have no effect on the allowance for doubtfulaccounts

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Health Auditing As A Tool For Quality Care Case Studies

Authors: Camila Freire

1st Edition

6206344169, 978-6206344162

More Books

Students also viewed these Accounting questions

Question

What aspects would it be impossible to capture?

Answered: 1 week ago

Question

Enhance your words with effective presentation aids

Answered: 1 week ago