AC 302 Chapter 18 Question 7

AC 302 Chapter 18 Question 7
Name				Date		
Instructor				Course		
Intermediate Accounting 14th Edition by Kieso Weygandt and Warfield						
Primer on Using Excel in Accounting by Rex A Schildhouse						
						
E18-7 (Sales Recorded Both Gross and Net) On June 3, Hunt Company sold to Ann Mount 						
merchandise having a sales price of			$8,000 	with terms of 2/10, n/60, f.o.b. shipping 		
point. An invoice totaling		$120 	, terms n/30, was received by Mount on June 8 from 			
the Olympic Transport Service for the freight cost. Upon receipt of the goods, June 5, Mount notified 						
Hunt Company that merchandise costing			$600 	contained flaws that rendered it worthless. 		
The same day, Hunt Company issued a credit memo covering the worthless merchandise and asked 						
that it be returned at company expense. The freight on the returned merchandise was 						$24 
paid by Hunt Company on June 7. On June 12, the company received a check for the balance due from Mount.						
						
						
Instructions:						
(a)(1) Prepare journal entries on Hunt Company books to record all the events noted above under the sales and receivables are entered at gross selling price concept.						
						
						
Jun 3	Account Title				Amount	
	Account Title					Amount
						
Jun 5	Account Title				Amount	
	Account Title					Amount
						
Jun 7	Account Title				Amount	
	Account Title					Amount
						
Jun 12	Account Title				Amount	
	Account Title				Amount	
	Account Title					Amount
						
(a)(2) Prepare journal entries on Hunt Company books to record all the events noted above under the sales and receivables are entered net of cash discounts concept.						
						
						
Jun 3	Account Title				Amount	
	Account Title					Amount
						
Jun 5	Account Title				Amount	
	Account Title					Amount
						
Jun 7	Account Title				Amount	
	Account Title					Amount
						
Jun 12	Account Title				Amount	
	Account Title					Amount
						
"(b) Prepare the journal entry under basis 2, assuming that Ann Mount did not remit payment until
    August 5."						
						
Aug 5	Account Title		4600		Amount	
	Account Title					Amount
	Account Title					Amount