9
Sales and Cash
2. The normal balance of Sales Discounts is a Dr. balance.
4. A discount period is a short period of time after sale during which a business
5. A. 2/10, n/30; 2 percent off the bill if paid within 10 days of the invoice date or total
6. Contra Revenue Account.
8. By placing the accounts in the accounts receivable subsidiary ledger in alphabetical
9. (√) means the subsidiary ledger is updated. A check is put in the PR column of the
general journal when the accounts receivable subsidiary ledger is updated.
10. An invoice is a bill for a sale on account; it is used as a source document to update
12. Disagree; sales discounts are not taken on freight, sales tax, or returns.
14. The question in this case is whether Amy should ask the accountant to put the first
two weeks of sales in January back into the previous December. Although Amy
wants to improve sales production, this is not the way to go about it. It is extremely unethical for
Copyright © 2016 Pearson Education, Inc.
9-3
SOLUTIONS TO CHAPTER 9 CONCEPT CHECKS
1.
Category
Revenue
Contra revenue
Contra revenue
2.
Gross Sales
$44
–SRA
-7
–SD
– 5
= Net Sales
$32
3.
a. 1, 2, 3
b. 1, 2, 3
c. 1, 2, 3
4.
Category
Contra revenue
Sales Returns &
Allowances
190
Accounts Receivable,
Pike.com
Asset
Cr. to decrease
Accounts
Receivable,
Pike.com
190
Copyright © 2016 Pearson Education, Inc.
9-4
Accounts Dr. Cr.
5. a.
Accounts Receivable, Troy Co.
50
Sales
50
Sale on Acct.
b.
Cash
291
Sales Discount
9
Accounts Receivable, Brown Co.
300
Brown Paid Bill
c.
Cash
104
Sales
104
Cash Sale
d.
Sales Returns and Allowances
18
Accounts Receivable, Troy Co.
18
Issued Credit Memo #2
6. LUCKY COMPANY
SCHEDULE OF ACCOUNTS RECEIVABLE
MAY 31, 201X
Jarad Co.
$ 104
Katz Co.
21
Turtle Co.
10
Total Accounts Receivable
$135
SOLUTIONS TO SET A EXERCISES
9A-1.
Twilight Co.
Accounts Receivable
112
9/18 GJ1 640
9/18 GJ1 640
9/19 GJ1 850
Bal. 1,490
12/18 GJ1 2100
700GJ112/20
12/18 GJ1 2100
EXERCISES (CONTINUED)
9A-3.
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Dec.
24
Cash
9
3
1
00
Sales Discount
4
9
00
Accounts Receivable, Cart Co.
9
8
0
00
EXERCISES (CONTINUED)
9A-4. Page 1
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Oct.
1
Cash
111
3
3
0
0
00
Ava Roberts, Capital
311
3
3
0
0
00
Owner Investment
1
Accounts Receivable, Charleston Co.
113/√
9
5
0
00
Sales
411
9
5
0
00
Sales on Account
2
Accounts Receivable, William Co.
113/√
9
6
0
00
Sales
411
9
6
0
00
Sales on Account
3
Cash
111/√
2
2
0
00
Sales
411
2
2
0
00
Cash Sale
8
Sales Returns and Allowances
412
3
5
0
00
Accounts Receivable, Charleston Co.
113/√
3
5
0
00
Issued Credit Memo #1
10
Cash
111
5
9
4
00
Sales Discounts
413
6
00
Accounts Receivable, Charleston Co.
113/√
6
0
0
00
Payment Received Less Discount
15
Cash
111
4
4
0
00
Sales
411
4
4
0
00
Cash Sales
18
Accounts Receivable, Charleston Co.
113/√
8
5
0
00
Sales
411
8
5
0
00
Sales on Account
EXERCISES (CONTINUED)
9A-4 (Continued)
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
PARTIAL GENERAL LEDGER
Charleston Co.
Cash
111
10/01 GJ1 950
350 GJ1 10/08
10/01 GJ1
3300
10/18 GJ1 850
600 GJ1 10/10
10/03 GJ1
220
Bal, 850
10/10 GJ1
594
10/15 GJ1
440
Bal. 4,554
William Co.
Accounts Receivable
113
10/02 GJ1 960
10/01 GJ1
950
350 GJ1 10/08
10/02 GJ1
960
600 GJ1 10/10
10/18 GJ1
850
Bal. 1,810
Ava Roberts, Capital
311
3300 GJ1 10/01
Sales
411
950 GJ1 10/01
960 GJ1 10/02
220 GJ1 10/03
440 GJ1 10/15
850 GJ1 10/18
3,420 Bal.
Sales Returns &
Allowances
Sales Discount
413
412
10/10 GJ1 6
10/8 GJ1 350
AVA CO.
SCHEDULE OF ACCOUNTS RECEIVABLE
OCTOBER 31, 201X
Charleston Co.
$850
William Co.
960
Total Accounts Receivable
$1,810
EXERCISES (CONTINUED)
9A–5.
Sales ticket price
$ 11,000
–
Credit for return
1,400
=
Sales price after credit
$ 9,600
X
Discount rate
5%
=
Discount
$ 480
Sales price after credit
$ 9,600
X
Sales tax rate
10%
=
Sales tax
$ 960
Sales price after credit
$ 9,600
+
Sales tax
960
=
Sales price after tax
$ 10,560
–
Discount
480
=
Amount paid
$ 10,080
SOLUTIONS TO SET B EXERCISES
9B-1.
Henry Co.
Accounts Receivable
112
5/18 GJ1 590
5/18 GJ1 590
5/19 GJ1 890
Bal. 1,480
Lincoln Co.
Sales
411
5/19 GJ1 890
590 GJ1 5/18
890 GJ1 5/19
1,480 Bal.
9B-2. Page 1
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Aug.
16
Accounts Receivable, Ralph Co.
112/√
9
4
0
00
Sales
411
9
4
0
00
Sales on Account
18
Accounts Receivable, Market Co.
112/√
1
8
0
0
00
Sales
411
1
8
0
0
00
Sales on Account
20
Sales Returns and Allowances
412
7
2
0
00
Accounts Receivable, Market Co.
112/√
7
2
0
00
Issued Credit Memo #1
8/18 GJ1 1,800
720 GJ1 8/20
1,800 GJ1 8/18
8/16 GJ1 940
8/18 GJ1 1,800
720 GJ1 8/20
Bal. 2,020
Sales Returns & Allowances 412