On September 12, Vander Company sold merchandise in the amount of $2,500 to Jepson Company, with credit terms of 2/10, n/30. The cost of the items sold is $1,725. Vander uses the periodic inventory system and the gross method of accounting for sales. On September 14, Jepson returns some of the merchandise. The selling price of the merchandise is $215 and the cost of the merchandise returned is $150. Jepson pays the invoice on September 18, and takes the appropriate discount. The journal entry that Vander makes on September 18 is: Multiple Choice Cash 1,725.00 Accounts receivable 1,725.00 Cash 2,454.30 Accounts receivable 2,454.30 Cash 2,239.30 Sales discounts 45.70 Accounts receivable 2,285.00 Cash 2,454.30 Sales discounts 45.70 Accounts receivable 2,500.00 Cash 2,500.00 Accounts receivable 2,500.00

Question

Camryn Brown

Business

8 June, 01:59

On September 12, Vander Company sold merchandise in the amount of $2,500 to Jepson Company, with credit terms of 2/10, n/30. The cost of the items sold is $1,725. Vander uses the periodic inventory system and the gross method of accounting for sales. On September 14, Jepson returns some of the merchandise. The selling price of the merchandise is $215 and the cost of the merchandise returned is $150. Jepson pays the invoice on September 18, and takes the appropriate discount. The journal entry that Vander makes on September 18 is: Multiple Choice Cash 1,725.00 Accounts receivable 1,725.00 Cash 2,454.30 Accounts receivable 2,454.30 Cash 2,239.30 Sales discounts 45.70 Accounts receivable 2,285.00 Cash 2,454.30 Sales discounts 45.70 Accounts receivable 2,500.00 Cash 2,500.00 Accounts receivable 2,500.00

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Answers (1)

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Atticus Medina · Answer 1

Cash 2,239.30

Sales discounts 45.70

Accounts receivable 2,285.00

Explanation:

When Vander Company sold merchandise

J1

Trade Receivable - Jepson Company $2,500 (debit)

Revenue $2,500 (credit)

J2

Cost of Sales $1,725 (debit)

Merchandise $1,725 (credit)

When Jepson returns some of the merchandise

J1

Revenue $215 (debit)

Trade Receivable-Jepson Company $215 (credit)

J2

Merchandise $150 (debit)

Cost of Sales $150 (credit)

When Jepson pays the invoice on September 18

J1

Discount Allowed $45.70 (debit)

Trade Receivable-Jepson Company $45.70 (credit)

($2,500-$215) * 2% = $45.70

J2

Cash $2,239.30 (debit)

Trade Receivable-Jepson Company $2,239.30 (credit)

($2,500-$215) * 98% = $45.70

Alternatively Combine the Journals:

Cash 2,239.30

Sales discounts 45.70

Accounts receivable 2,285.00