Sales and Sales Returns and Allowances

Gold Enterprises had the following sales$-$related transactions on a recent day:

a$.$ Billed customer $$14,200$ on account for services already provided.

b$.$ Collected $$6,450$ in cash for services to be provided in the future.

c$.$ The customer complained about aspects of the services provided in Transaction a$.$ To maintain a good relationship with this customer, Gold granted an

allowance of $$700$ off the list price. The customer had not yet paid for the services.

d$.$ Gold provided the services for the customer in Transaction b$.$ Additionally, Gold granted an allowance of $$300$ because the services were provided after

the promised date. Because the customer had already paid, Gold paid the $$300$ allowance in cash.

Required:

Prepare the necessary journal entry $($or entries$)$ for each of these transactions. If an amount box does not require an entry, leave it blank.

a$.$

b$.$

$(1)$

c$.$

d$.$

Conceptual Connection: What concerns would Gold have assuming that the sales allowances for this period were significantly higher than in previous

periods both in absolute terms and as a percentage of gross sales?

Given that the company is a service provider, a significant

in sales allowances suggests that customers are

with aspects of the service provided. The company's management,

investigate the causes of this dissatisfaction. For example, in

transaction d$,$ the services

provided late. Perhaps the company isunderstaffed in certain functions. Not only will understaffing cause

delays, but it

also create quality problems as staff hurry to meet deadlines and become fatigued from

overtime.