Net Sales ("Gross" Sales less dissatisfied customers and customers who pay us early) (8 points) To track our dissatisfied customers, we will use a contra-revenue account called Sales Returns and Allowances. A Sales Return is when the customer returns the goods. A Sales Allowance is when we reduce their invoice (their A/R) to keep them happy. But let's just use one contra-revenue account for both situations. To encourage customers to pay us carly, we can offer them terms, c.8. if you pay us within 10 days of the invoice, you may take a discount of 2% off your bill. We will track these Sales Discounts in another contra revenue account called Sales Discounts. We have an SF Giants fan shop in Roseburg, Oregon - no sales tax. We sell $108 of souvenirs to Sue. She will pay us later. We give her terms: 2/10, net 30. Account DR CR Date 1/1/20 Memo: Caps, visors, cups, pens A/R - Sue The next day, Sue, calls. She thought the pens wrote in orange ink, not "Dodger" blue. We grant her an allowance of $3. Account DR Date 1/2/20 Memo: Granted Sue an allowance of 53 The next day, Sue returns a pennant. The original price was $5. Account DR Date 1/3/20 Memo: Sue returned a pennant that we sold her for $5 It is now January 7, Sue cuts us a check and takes advantage of the 2% discount Date Account 1/7/20 Memo: Sue paid early, fook 2% discours If Sue is our only customer, what were our net sales for January? Gross Sales Less: Sales Returns and Allowances Less: Sales Discounts Net Sales Using Accounts Receivable as a source of IMMEDIATE Cash (factoring) Let's assume we have a total of $250,000 of A/R and an Allowance for Doubtful Accounts of $1,500. We sell these A/R to a Factor and they agree to pay us $235,000. Accounts Date 1/1/20 Please assume this transaction qualifies as a sale rather than a loan. At March 31, the balance of the Cash account according to the records of Jones Company was $2,590. The bank statement showed a balance of $2.530. You are to prepare the bank reconciliation of Jones Company at March 31, using the following information (9 points): (a) Deposit in transit at March 31 - $3,250 (b) Outstanding checks (not cleared by bank yet) - $310 (check #210). $1,000 (check #211). $210 (check #216) and $900 (check #224) (c) Service charge by bank-$35 (d) The bank statement showed that a note receivable for $1,000 owed to Jones Company had been collected and the proceeds deposited into the company's account on March 28. There was no interest involved. (e) A check for $150 drawn by a customer, D. Beat, was returned marked "NSF" (1) Jones' check no. 209, was issued in payment of $172 worth of office supplies (an expense account) correctly written for $172 but erroneously recorded in Jones' accounting records as $127. Bank Reconciliation Balance per bank statement Add: Deduct: Adjusted balance Balance per depositor's records Add: Deduct: Adjusted balance PLEASE SHOW THE JOURNAL ENTRY OR ENTRIES NEEDED TO UPDATE OUR BOOKS Entry Date 3/31 DEBIT CREDIT
