You are having a hard time selling a stuffed (deceased) pony from your downtown showroom and decide to offer a sales discount for early payment to any customer who will purchase the pony and pay within 10 days The normal selling price is $8,000, but customers who pay within the discount period will receive a 20 discount Full payment must be made within 30 days (20 10, n 30) A customer purchases the pony on account but calls you up the next day to complain that the pony has mold damage They want to return the pony, but you convince them to keep it by offering them a partial refund of 15 Two days after the customer received the partial refund (3 days after the initial purchase), the customer pays their remaining balance in full PAY ATTENTION THIS QUESTION HAS 2 PARTS (AND IS WORTH 10 POINTS) From the answer choices below select the option which correctly states both of the following An item that would be included in the journal entry recorded on the day that you offer the customer the partial discount (assuming the journal entry for the initial purchase was correctly recorded) The amount of cash you receive when the customer pays you in full 3 days after the initial purchase For example, if the journal entry at the time of the partial refund is Moldy Pony Expense $3 gazillion dollars Angry Customer Liability $3 gazillion dollars And the amount of cash received when the customer pays in full is $0 52 then a correct answer would be DEBIT to Moldy Pony Expense for $3 gazillion dollars $0 52 Only one of the answer choices given below is completely correct CREDIT to Sales Allowances for $1,200 $1,360 CREDIT to Accounts Receivable for $1,200 $1,360 CREDIT to Cash for $1,200 $1,360 CREDIT to Sales Returns for $1,200 $1,360 CREDIT to Sales Discounts for $960 $1,360 CREDIT to Trade Discounts for $960 $1,360 CREDIT to Sales Revenue for $960 $1,360 CREDIT to Accounts Payable for $960 $1,360 CREDIT to Sales Allowances for $1,200 $5,440 CREDIT to Accounts Receivable for $1,200 $5,440 CREDIT to Cash for $1,200 $5,440 CREDIT to Sales Returns for $1,200 $5,440 CREDIT to Sales Discounts for $960 $5,440 CREDIT to Trade Discounts for $960 $5,440 CREDIT to Sales Revenue for $960 $5,440 CREDIT to Accounts Payable for $960 $5,440 CREDIT to Sales Allowances for $1,200 $6,800 CREDIT to Accounts Receivable for $1,200 $6,800 CREDIT to Cash for $1,200 $6,800 CREDIT to Sales Returns for $1,200 $6,800 CREDIT to Sales Discounts for $960 $6,800 CREDIT to Trade Discounts for $960 $6,800 CREDIT to Sales Revenue for $960 $6,800 CREDIT to Accounts Payable for $960 $6,800 CREDIT to Sales Allowances for $1,200 $768 CREDIT to Accounts Receivable for $1,200 $768 CREDIT to Cash for $1,200 $768 CREDIT to Sales Returns for $1,200 $768 CREDIT to Sales Discounts for $960 $768 CREDIT to Trade Discounts for $960 $768 CREDIT to Sales Revenue for $960 $768 CREDIT to Accounts Payable for $960 $768 CREDIT to Sales Allowances for $1,200 $10,400 CREDIT to Accounts Receivable for $1,200 $10,400 CREDIT to Cash for $1,200 $10,400 CREDIT to Sales Returns for $1,200 $10,400 CREDIT to Sales Discounts for $960 $10,400 CREDIT to Trade Discounts for $960 $10,400 CREDIT to Sales Revenue for $960 $10,400 CREDIT to Accounts Payable for $960 $10,400 CREDIT to Sales Allowances for $1,200 $960 CREDIT to Accounts Receivable for $1,200 $960 CREDIT to Cash for $1,200 $960 CREDIT to Sales Returns for $1,200 $960 CREDIT to Sales Discounts for $960 $960 CREDIT to Trade Discounts for $960 $960 CREDIT to Sales Revenue for $960 $960 CREDIT to Accounts Payable for $960 $960 CREDIT to Sales Allowances for $1,200 $1,600 CREDIT to Accounts Receivable for $1,200 $1,600 CREDIT to Cash for $1,200 $1,600 CREDIT to Sales Returns for $1,200 $1,600 CREDIT to Sales Discounts for $960 $1,600 CREDIT to Trade Discounts for $960 $1,600 CREDIT to Sales Revenue for $960 $1,600 CREDIT to Accounts Payable for $960 $1,600 CREDIT to Sales Allowances for $1,200 $6,400 CREDIT to Accounts Receivable for $1,200 $6,400 CREDIT to Cash for $1,200 $6,400 CREDIT to Sales Returns for $1,200 $6,400 CREDIT to Sales Discounts for $960 $6,400 CREDIT to Trade Discounts for $960 $6,400 CREDIT to Sales Revenue for $960 $6,400 CREDIT to Accounts Payable for $960 $6,400

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Posted on Aug 22, 2024

You are having a hard time selling a stuffed (deceased) pony from your downtown showroom and decide to offer a sales discount for early payment

You are having a hard time selling a stuffed (deceased) pony from your downtown showroom and decide to offer a sales discount for early payment to any customer who will purchase the pony and pay within 10 days. The normal selling price is $8,000, but customers who pay within the discount period will receive a 20% discount. Full payment must be made within 30 days (20/10, n/30). A customer purchases the pony on account but calls you up the next day to complain that the pony has mold damage. They want to return the pony, but you convince them to keep it by offering them a partial refund of 15%. Two days after the customer received the partial refund (3 days after the initial purchase), the customer pays their remaining balance in full.

PAY ATTENTION: THIS QUESTION HAS 2 PARTS (AND IS WORTH 10 POINTS).

From the answer choices below select the option which correctly states both of the following:

An item that would be included in the journal entry recorded on the day that you offer the customer the partial discount (assuming the journal entry for the initial purchase was correctly recorded)
The amount of cash you receive when the customer pays you in full 3 days after the initial purchase.

For example, if the journal entry at the time of the partial refund is:

Moldy Pony Expense $3 gazillion dollars

Angry Customer Liability $3 gazillion dollars

And the amount of cash received when the customer pays in full is $0.52 then a correct answer would be:

DEBIT to Moldy Pony Expense for $3 gazillion dollars; $0.52

Only one of the answer choices given below is completely correct.

		CREDIT to Sales Allowances for $1,200; $1,360
		CREDIT to Accounts Receivable for $1,200; $1,360
		CREDIT to Cash for $1,200; $1,360
		CREDIT to Sales Returns for $1,200; $1,360
		CREDIT to Sales Discounts for $960; $1,360
		CREDIT to Trade Discounts for $960; $1,360
		CREDIT to Sales Revenue for $960; $1,360
		CREDIT to Accounts Payable for $960; $1,360
		CREDIT to Sales Allowances for $1,200; $5,440
		CREDIT to Accounts Receivable for $1,200; $5,440
		CREDIT to Cash for $1,200; $5,440
		CREDIT to Sales Returns for $1,200; $5,440
		CREDIT to Sales Discounts for $960; $5,440
		CREDIT to Trade Discounts for $960; $5,440
		CREDIT to Sales Revenue for $960; $5,440
		CREDIT to Accounts Payable for $960; $5,440
		CREDIT to Sales Allowances for $1,200; $6,800
		CREDIT to Accounts Receivable for $1,200; $6,800
		CREDIT to Cash for $1,200; $6,800
		CREDIT to Sales Returns for $1,200; $6,800
		CREDIT to Sales Discounts for $960; $6,800
		CREDIT to Trade Discounts for $960; $6,800
		CREDIT to Sales Revenue for $960; $6,800
		CREDIT to Accounts Payable for $960; $6,800
		CREDIT to Sales Allowances for $1,200; $768
		CREDIT to Accounts Receivable for $1,200; $768
		CREDIT to Cash for $1,200; $768
		CREDIT to Sales Returns for $1,200; $768
		CREDIT to Sales Discounts for $960; $768
		CREDIT to Trade Discounts for $960; $768
		CREDIT to Sales Revenue for $960; $768
		CREDIT to Accounts Payable for $960; $768
		CREDIT to Sales Allowances for $1,200; $10,400
		CREDIT to Accounts Receivable for $1,200; $10,400
		CREDIT to Cash for $1,200; $10,400
		CREDIT to Sales Returns for $1,200; $10,400
		CREDIT to Sales Discounts for $960; $10,400
		CREDIT to Trade Discounts for $960; $10,400
		CREDIT to Sales Revenue for $960; $10,400
		CREDIT to Accounts Payable for $960; $10,400
		CREDIT to Sales Allowances for $1,200; $960
		CREDIT to Accounts Receivable for $1,200; $960
		CREDIT to Cash for $1,200; $960
		CREDIT to Sales Returns for $1,200; $960
		CREDIT to Sales Discounts for $960; $960
		CREDIT to Trade Discounts for $960; $960
		CREDIT to Sales Revenue for $960; $960
		CREDIT to Accounts Payable for $960; $960
		CREDIT to Sales Allowances for $1,200; $1,600
		CREDIT to Accounts Receivable for $1,200; $1,600
		CREDIT to Cash for $1,200; $1,600
		CREDIT to Sales Returns for $1,200; $1,600
		CREDIT to Sales Discounts for $960; $1,600
		CREDIT to Trade Discounts for $960; $1,600
		CREDIT to Sales Revenue for $960; $1,600
		CREDIT to Accounts Payable for $960; $1,600
		CREDIT to Sales Allowances for $1,200; $6,400
		CREDIT to Accounts Receivable for $1,200; $6,400
		CREDIT to Cash for $1,200; $6,400
		CREDIT to Sales Returns for $1,200; $6,400
		CREDIT to Sales Discounts for $960; $6,400
		CREDIT to Trade Discounts for $960; $6,400
		CREDIT to Sales Revenue for $960; $6,400
		CREDIT to Accounts Payable for $960; $6,400