Presented below is information from perez computers incorporated. july 1 sold $20,000 of computers to robertson company with terms

Presented below is information from perez computers incorporated. july 1 sold $20,000 of computers to robertson company with terms 3/15, n/60. perez uses the gross method to record cash discounts. 10 perez received payment from robertson for the full amount owed from the july transactions. 17 sold $200,000 in computers and peripherals to the clark store with terms of 2/10, n/30. 30 the clark store paid perez for its purchase of july 17

Answers

A journal is provided as an attachment to record the entries for Perez Computers.

Explanation:

The gross method of cash discounts assumes that the customer will not take advantage of the offered discount.  It therefore records the sale in full without netting off the discount element.  This was done in the answer.

When Robertson paid within 10 days, the 3% cash discount was allowed since payment was received within the terms of 15 days.

For The Clark Store, there was no discount because payment was received later than the allowed 10 days.

Explanation:

The Journal Entry is shown below:-

1. Accounts Receivable Dr,            $20,000

           To cash revenue                                $20,000

(Being computer sold is recorded)

2. Cash Dr,                                         $19,400

    Sales discount Dr,                         $600

             To accounts receivable                    $20,000

(Being cash is received)

3. Accounts receivable Dr,               $200,000

              To sales revenue                               $200,000

(Being sales revenue is recorded)

4. Cash Dr,                                          $200,000

               To accounts receivable                     $200,000

(Being cash is recorded)

Journal entries

Explanation:

The journal entries are as follows

On July 1      

Accounts receivable$20,000  

            To Sales revenue  $20,000

(Being the sales is recorded)

On July 10

Cash$194,00  

Sales discount$600        ($20,000 × 3%)

         To Accounts receivable   $20,000

(Being the sale is recorded)

On July 17

Accounts receivable$200,000  

            To Sales revenue  $200,000

(Being the sales is recorded)

On July 30

Cash$200,000  

          To    Accounts receivable  $200,000

(Being the amount received is recorded)

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