Appendix 1: Gross and net methods for sales discounts The following were selected from among the transactions completed by Strong Retail Group during August of the current year: Aug. 5. Sold merchandise on account to M. Quinn, $7,500, terms 2/10, n/30. The cost of the merchandise sold was $4,200. 9. Sold merchandise on account to R. Busch., $4,000, terms 1/10, n/30. The cost of the merchandise sold was $2,100. 15. Received payment on account for the sale of August 5 less the discount. 20. Sold merchandise on account to S. Mooney, $6,000, terms n/eom. The cost of the merchandise sold was $3,300. 25. Received payment on account for the sale of August 9. 31. Received payment on account for the sale of August 20. a. Journalize the August transactions using the gross method of recording sales discounts. If an amount box does not require an Aug. 5 Accounts Receivable-M. Quinn 7,500 Sales 7,500 God Cos 5 4,200 Inventory 4,200 9 Accounts Receivable-R. Busch 4,000 Sales 4,000 Cost of Goods Sold 9 2,100 9 Accounts Receivable R. Busch 4,000 Sales 4,000 Cost of Goods Sold 9 2,100 Inventory 2,100 Cash 15 7,350 Sales 150 Accounts Receivable-M. Quinn 7,500 Accounts Receivable-S. Mooney 20 6,000 Sales 6,000 Cost of Goods Sold 20 3,300 Inventory 3,300 Cash 25 4,000 Accounts Receivable-R. Busch 4,000 Cash 31 6,000 Accounts Receivable-S. Mooney 6,000 b. Journalize the August transactions using the net method of recording sales discounts. Aug. 5 Accounts Receivable-M. Quinn 7,350 Sales 7,350 5 Cost of Goods Sold 4,200 Inventory 4,200 Accounts Receivable-R. Busch 9 3,960 Sales 3,960 9 Cost of Goods Sold 2,100 Inventory 2,100 Cash 15 7,350 Accounts Receivable-M. Quinn 7,350 20 Accounts Receivable-S. Mooney 6,000 Sales 6,000 20 Cost of Goods Sold 3,300 Inventory 3,300 Cash 25 4,000 Accounts Receivable-R. Busch 3,960 Sales 40 Cash 31 6,000 Accounts Receivable-S. Mooney 6,000 c. What is the total sales for August under each method? Gross method $ 17,500 X Net method $ 17,310 X