Fashion Jewelers uses the perpetual inventory system. On April 2, Fashion sold goods with a cost of $5,500 for $14,000 with terms of 4/15, n/30. On April 4, the customer reported damaged goods and Fashion granted a $2,000 sales allowance. On April 10, Fashion received the payment for the sale. Give the journal entry that will be recorded on April 10 by Fashion.

Question

Kaelyn

Business

12 April, 17:24

Fashion Jewelers uses the perpetual inventory system. On April 2, Fashion sold goods with a cost of $5,500 for $14,000 with terms of 4/15, n/30. On April 4, the customer reported damaged goods and Fashion granted a $2,000 sales allowance. On April 10, Fashion received the payment for the sale. Give the journal entry that will be recorded on April 10 by Fashion.

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Rylie Munoz · Answer 1

The journal entry is shown below:

Cash A/c Dr $11,520

Sales discount A/c Dr $480

To Account Receivable $12,000

(Being the cash received is recorded with discount)

Since in the cost of goods sold is $14,000 in which the $2,000 reflect returned goods, so the remaining balance is $12,000

And, the payment is made within 30 days, so the customer can avail 4% of the goods received

So, the discount would be = $12,000 * 4% = $480