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15 February, 07:14

On February 3, Smart Company sold merchandise in the amount of $5,800 to Truman Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Smart uses the perpetual inventory system and the gross method. Truman pays the invoice on February 8, and takes the appropriate discount. The journal entry that Smart makes on February 8 is:a. Cash 5,684Sales discounts 116Accounts receivable 5,800b. leash : Accounts receivable5,6841 : 5,6841C. I Cash: Accounts receivable5,800 I : 5,800 Id. leash: Accounts receivable4,0001 : 4,000 Ie. Cash 3,920

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  1. 15 February, 07:24
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    a. Cash 5,684 Sales discounts 116, Accounts receivable 5,800

    Explanation:

    The journal entry is shown below:

    Cash A/c Dr $5,684

    Sales Discount A/c Dr $116

    To Accounts receivable $5,800

    (Being cash received recorded)

    The computation of the account receivable

    = $5,800

    And, the discount would be

    = Accounts receivable * percentage given

    = $5,800 * 2%

    = $116

    The remaining amount would be credited to the cash account i. e $5,684 ($5,800 - $116)
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