Answered

On June 3, Flint Company sold to Chester Company merchandise having a sale price of $5,200 with terms of 2/10, n/60, f.o.b. shipping point. An invoice totaling $97, 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.Prepare journal entries on the Flint 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.
(2) Sales and receivables are entered at net of cash discounts.

Answer :

tanseershar

Answer:

The journal entries will be as follows;

Explanation:

1.  June 3.

     Accounts receivable     Dr.$5,200

    Sales Revenue               Cr.$5,200

Cost of Goods Sold  ($5,200+$97)  Dr.$5,297

Inventory                                            Cr.$5,297  

June 12.

    Cash             Dr. (5,200*98%)$5,096

    Cash Discount Dr.$104

   Accounts Receivable     Cr.    $5,200

2.  June 3

   A/R    Dr.$5,096    

  Cash Discount Dr.$104

  Sales Revenue Cr.$5,200

Cost of Goods Sold   Dr.$5,297

Inventory                    Cr.$5,297

June 12.

Cash Dr.$5,096

A/R    Cr.$5,096

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