Sales and Sales Returns and Allowances

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

List price of services provided on credit was $27,500; terms 2/10, n/30.

Collected $5,875 in cash for services to be provided in the future.

The customer complained about aspects of the services provided in Transaction a. To maintain a good relationship with this customer, Rubin granted an allowance of $1,500 off the list price. The customer had not yet paid for the services.

Rubin provided the services for the customer in Transaction b. Additionally, Rubin granted an allowance of $350 because the services were provided after the promised date. Because the customer had already paid, Rubin paid the $350 allowance in cash.

Required:

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1. Prepare the necessary journal entry (or entries) for each of these transactions.

	Account and Explanation	Debit	Credit
a.	Correct 6 of Item 1	Correct 7 of Item 1
	Correct 8 of Item 1		Correct 9 of Item 1
	Record sale
b.	Correct 12 of Item 1	Correct 13 of Item 1
	Correct 14 of Item 1		Correct 15 of Item 1
	Record collection of cash for future services
c.	Correct 18 of Item 1	Correct 19 of Item 1
	Correct 20 of Item 1		Correct 21 of Item 1
	Record allowance due to inadequate service being provided
d.	Correct 24 of Item 1	Correct 25 of Item 1
	Correct 26 of Item 1		Correct 27 of Item 1
	Record recognition of sales revenue
	Correct 30 of Item 1	Correct 31 of Item 1
	Correct 32 of Item 1		Correct 33 of Item 1
	Record allowance for services which were performed late