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Accounting for Sales on Credit: Gross Method

On December 29, 2020, Sabre Company sold merchandise for $2,000 on credit terms, 3/10, n/60. The accounting period ends December 31.

Provide the following entries under the gross method.

Note: If a line in a journal entry isn't required for the transaction, select "N/A" as the account name and leave the Dr. and Cr. answers blank (zero).

answer choices:

Cash Accounts Receivable Allowance for Doubtful Accounts Interest Receivable Receivable from Factor Note Receivable Discount on Note Receivable Payable to Seller of Receivables Refund Liability Recourse Liability Note Payable Sales Revenue Sales Returns Sales Discount Sales Discount Forfeited Financing Revenue Interest Revenue Cost of Goods Sold Bad Debt Expense Finance Expense Interest Expense Loss on Sale of Note Loss on Sale of Receivables N/A ???

a. Record the 2020 sale. Omit the cost of good sold entry.

Account Name	Dr.	Cr.
?	?	?
?	?	?

b. Record collection of the account, assuming collection took place on January 5, 2021.

Account Name	Dr.	Cr.
Cash	?	?
?	?	?
?	?	?

c. Record collection of the account, assuming collection took place on April 1, 2021.

Account Name	Dr.	Cr.
?	?	?
?	?	?

d. Indicate what should be reported on the balance sheet (ignoring cash) and income statement for both 2020 and 2021.

Note: Indicate a contra account balance with a negative sign.

1. First assume parts a and b occur.

Balance Sheet, Dec 31	2020	2021
?	?	?
Income Statement	2020	2021
?	?	?

2. Now assume parts a and c occur.

Balance Sheet, Dec 31	2020	2021
?	?	?
Income Statement	2020	2021
?	?	?

a. Record the 2020 sale. Omit the cost of good sold entry. Account Name Dr. Cr. 0 0 0 0 b. Record collection of the account, assuming collection took place on January 5, 2021. Account Name Dr. Cr. Cash 0 0 0 0 0 0 c. Record collection of the account, assuming collection took place on April 1, 2021 Account Name Dr. Cr. 0 0 0 0 d. Indicate what should be reported on the balance sheet (ignoring cash) and income statement for both 2020 and 2021. Note: Indicate a contra account balance with a negative sign. 1. First assume parts a and boccur. Balance Sheet, Dec 31 2020 2021 0 2020 Income Statement 2021 Sales Revenue, net 0 0 2. Now assume parts a and coccur. Balance Sheet, Dec 31 2020 2021 0 2020 2021 Income Statement Sales Revenue, net 0