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15 September, 18:37

On September 12, Vander Company sold merchandise in the amount of $4,600 to Jepson Company, with credit terms of 2/10, n/30. The cost of the items sold is $3,175. 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 $400 and the cost of the merchandise returned is $280. Jepson pays the invoice on September 18, and takes the appropriate discount. The journal entry that Vander makes on September 18 is:

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  1. 15 September, 18:56
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    Dr Cash 4,116

    Dr Sales discounts 84

    Cr Accounts receivable 4,200

    Explanation:

    Vander Company Journal entry

    Dr Cash 4,116

    (4,200-82)

    Dr Sales discounts 84

    Cr Accounts receivable 4,200

    Calculation of Sales discounts

    4,200*2%

    =84

    Merchandise

    (4,600-400)

    =4,200
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