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 entry, leave it blank.

Aug. 5	Accounts Receivable-M. Quinn	fill in the blank fcb0f5f4904103d_2	fill in the blank fcb0f5f4904103d_3
	Sales	fill in the blank fcb0f5f4904103d_5	fill in the blank fcb0f5f4904103d_6
Aug. 5	Cost of Merchandise Sold	fill in the blank fcb0f5f4904103d_8	fill in the blank fcb0f5f4904103d_9
	Merchandise Inventory	fill in the blank fcb0f5f4904103d_11	fill in the blank fcb0f5f4904103d_12
Aug. 9	Accounts Receivable-R. Busch	fill in the blank fcb0f5f4904103d_14	fill in the blank fcb0f5f4904103d_15
	Sales	fill in the blank fcb0f5f4904103d_17	fill in the blank fcb0f5f4904103d_18
Aug. 9	Cost of Merchandise Sold	fill in the blank fcb0f5f4904103d_20	fill in the blank fcb0f5f4904103d_21
	Merchandise Inventory	fill in the blank fcb0f5f4904103d_23	fill in the blank fcb0f5f4904103d_24
Aug. 15	Cash	fill in the blank fcb0f5f4904103d_26	fill in the blank fcb0f5f4904103d_27
	Sales	fill in the blank fcb0f5f4904103d_29	fill in the blank fcb0f5f4904103d_30
	Accounts Receivable-M. Quinn	fill in the blank fcb0f5f4904103d_32	fill in the blank fcb0f5f4904103d_33
Aug. 20	Accounts Receivable-S. Mooney	fill in the blank fcb0f5f4904103d_35	fill in the blank fcb0f5f4904103d_36
	Sales	fill in the blank fcb0f5f4904103d_38	fill in the blank fcb0f5f4904103d_39
Aug. 20	Cost of Merchandise Sold	fill in the blank fcb0f5f4904103d_41	fill in the blank fcb0f5f4904103d_42
	Merchandise Inventory	fill in the blank fcb0f5f4904103d_44	fill in the blank fcb0f5f4904103d_45
Aug. 25	Cash	fill in the blank fcb0f5f4904103d_47	fill in the blank fcb0f5f4904103d_48
	Accounts Receivable-R. Busch	fill in the blank fcb0f5f4904103d_50	fill in the blank fcb0f5f4904103d_51
Aug. 31	Cash	fill in the blank fcb0f5f4904103d_53	fill in the blank fcb0f5f4904103d_54
	Accounts Receivable-S. Mooney	fill in the blank fcb0f5f4904103d_56	fill in the blank fcb0f5f4904103d_57

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a. Consider accounts and amounts to be debited and credited using the gross method of recording sales discounts. Recall that any discounts taken reduce sales.

b. Journalize the August transactions using the net method of recording sales discounts. If an amount box does not require an entry, leave it blank.

Aug. 5	Accounts Receivable	fill in the blank 374ac403100e01a_2	fill in the blank 374ac403100e01a_3
	Sales	fill in the blank 374ac403100e01a_5	fill in the blank 374ac403100e01a_6
Aug. 5	Cost of Merchandise Sold	fill in the blank 374ac403100e01a_8	fill in the blank 374ac403100e01a_9
	Merchandise Inventory	fill in the blank 374ac403100e01a_11	fill in the blank 374ac403100e01a_12
Aug. 9	Accounts Receivable	fill in the blank 374ac403100e01a_14	fill in the blank 374ac403100e01a_15
	Sales	fill in the blank 374ac403100e01a_17	fill in the blank 374ac403100e01a_18
Aug. 9	Cost of Merchandise Sold	fill in the blank 374ac403100e01a_20	fill in the blank 374ac403100e01a_21
	Merchandise Inventory	fill in the blank 374ac403100e01a_23	fill in the blank 374ac403100e01a_24
Aug. 15	Cash	fill in the blank 374ac403100e01a_26	fill in the blank 374ac403100e01a_27
	Accounts Receivable	fill in the blank 374ac403100e01a_29	fill in the blank 374ac403100e01a_30
Aug. 20	Accounts Receivable	fill in the blank 374ac403100e01a_32	fill in the blank 374ac403100e01a_33
	Sales	fill in the blank 374ac403100e01a_35	fill in the blank 374ac403100e01a_36
Aug. 20	Cost of Merchandise Sold	fill in the blank 374ac403100e01a_38	fill in the blank 374ac403100e01a_39
	Merchandise Inventory	fill in the blank 374ac403100e01a_41	fill in the blank 374ac403100e01a_42
Aug. 25	Cash	fill in the blank 374ac403100e01a_44	fill in the blank 374ac403100e01a_45
	Accounts Receivable	fill in the blank 374ac403100e01a_47	fill in the blank 374ac403100e01a_48
	Sales	fill in the blank 374ac403100e01a_50	fill in the blank 374ac403100e01a_51
Aug. 31	Cash	fill in the blank 374ac403100e01a_53	fill in the blank 374ac403100e01a_54
	Accounts Receivable	fill in the blank 374ac403100e01a_56	fill in the blank 374ac403100e01a_57

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b. Consider the accounts and amounts to be debited and credited using the net method of recording sales discounts. Recall that any discounts not taken increase sales.

c. What is the total sales for August under each method?

	Total Sales
Gross method	$fill in the blank d0acf4fddfd8fa3_1
Net method	$fill in the blank d0acf4fddfd8fa3_2

d. Which method of recording sales discounts requires an end-of-period adjusting entry?

Gross method

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Partially correct