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Question 1 CompanyXsoldmerchandisefor$50,000withterms3/30,n/90onJanuary1.OnJanuary29, CompanyXreceivedhalfthepaymentincash.OnMarch1,theyreceivedtheremaininghalf. Prepare the journal entries to record the sale and the receipt of cash under (1) the gross method and (2) the

Question 1

CompanyXsoldmerchandisefor$50,000withterms3/30,n/90onJanuary1.OnJanuary29, CompanyXreceivedhalfthepaymentincash.OnMarch1,theyreceivedtheremaininghalf. Prepare the journal entries to record the sale and the receipt of cash under (1) the gross method and (2) the net method.

What effect does using the gross method vs. the net method have on the company's current ratio after the sale? After the receipt of cash?

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