On October 23rd, 2020, LSU Company sold Christmas toys to UTB. The cost of the toys is $50,000, and the selling price is $100,000. The sales terms are 2/10 (2% discount paid within 10 days of sales), n/30 (full payment within a month of sales), and f.o.b. shipping point. LSU Company estimated that toys with a sales value of $9,000 will be returned. On October 25^th, LSU company received from UTB toys with a sale value of $7,000 due to product flaws. On November 1st, LSU Company received a check from UTB for the balance due.

Instructions

1. Prepare journal entries for LSU Company to record the events on the following dates assuming sales and receivables are entered at the gross selling price (6 points).

October 23rd
October 24th

2. On October 31, LSU Company prepares financial statements. Record necessary adjusting entries needed to be related to the sales on October 31, 2020 (4 points).

October 31st

3. Prepare the journal entry when LSU Company receives payment on November 1 (6 points).

November 1st

4. Assuming the payment is received on November 5^th instead of November 1^st, prepare the journal entry for LSU Company on November 5^th (4 points).

November 5th