(Record Sales Gross and Net) On June 3, Arnold Company sold to Chester Company

merchandise having a sale price of

$3,000

with terms of 2/10, n/60, f.o.b.

shipping point. An invoice totaling

$90

, 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.

Instructions:

(a) Prepare journal entries on the Arnold 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.

Jun 3

Account Title

Account Title

Account Title

Jun 12

Account Title

Account Title

Account Title

(2) Sales and receivables are entered at net cash discounts.

Jun 3

Account Title

Account Title

Account Title

Jun 12

Account Title

Account Title

Account Title

(b) Prepare the journal entry under basis 2, assuming that Chester Company did not remit payment until July 29.

Jul 29

Account Title

Account Title

Account Title