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On June 3, Vaughn Company sold to Chester Company merchandise having a sale price of $2,200 with terms of 4/10, n/60, fo.b. shipping point. An
On June 3, Vaughn Company sold to Chester Company merchandise having a sale price of $2,200 with terms of 4/10, n/60, fo.b. shipping point. An invoice totaling $97, terms n/30, was received by Chester on June 8 from John Booth Transport Service for the freight cost. On June 12, the company received a check for the balance due from Chester Company. (a) Your answer is partially correct. 1 Prepare journal entries on the Vaughn Company books to record all the events noted above under each of the following bases. (1) Sales and receivables are entered at gross selling price. (2) Sales and receivables are entered at net of cash discounts, (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation 2200 une 3 Accounts Receivable 2200 Sales Revenue 1400 : 12 Cash 800 Sales Discounts 2200 Accounts Receivable 1400 une 8 Accounts Receivable Sales Revenue 1400 IN 1400 Cash une 12 Accounts Receivable 1400 (b) Your answer is partially correct. Prepare the journal entry under basis 2, assuming that Chester Company did not remit payment until July 29. (If no entry is required, select "No Entry" for the account titles and enter for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation 60 July 29 Cash 60 Accounts Receivable Sales Discounts Forfeited
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