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The following transactions were selected from among those completed by Hailey Retailers in the current year:

Nov. 20 Sold two items of merchandise to Customer B, who charged the $460 (total) sales price on her Visa credit card. Visa charges Hailey a 1 percent credit card fee.
25 Sold 14 items of merchandise to Customer C at an invoice price of $3,400 (total); terms 2/10, n/30.
28 Sold 12 identical items of merchandise to Customer D at an invoice price of $8,040 (total); terms 2/10, n/30.
30 Customer D returned one of the items purchased on the 28th; the item was defective and credit was given to the customer.

Dec. 06 Customer D paid the account balance in full.
30 Customer C paid in full for the invoice of November 25.

Required:
a. Prepare the appropriate journal entry for each of these transactions. Do not record cost of goods sold.
b. Compute Net Sales.

Respuesta :

anthougo

Answer:

Hailey Retailers

a. Journal Entries:

Nov. 20:

Debit Visa Card $455.40

Debit Card Charges $4.60

Credit Sales Revenue $460

To record the sale of goods via Visa credit card.

Nov. 25:

Debit Accounts Receivable $3,400

Credit Sales Revenue $3,400

To record the sale of goods on account, terms 2/10, n/30.

Nov. 28:

Debit Accounts Receivable $8,040

Credit Sales Revenue $8,040

To record the sale of goods on account, terms 2/10, n/30.

Nov. 30:

Debit Sales Returns $670

Credit Accounts Receivable $670

To record the return of the defective items.

Dec. 06:

Debit Cash $7,222.60

Debit Cash Discount $147.40

Credit Accounts Receivable $7,370

To record the receipt from Customer D.

Dec. 30:

Debit Cash $3,400

Credit Accounts Receivable $3,400

To record the receipt from Customer C.

b. Computation of the Net Sales:

Nov. 20: Sales Revenue    $460

Nov. 25: Sales Revenue $3,400

Nov. 28: Sales Revenue $8,040

Nov. 30: Sales Returns    $(670)

Net Sales =                    $11,230

Explanation:

Hailey Retailers' net sales equals the addition of the sales revenue minus the sales returns.

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