a. sampson co. sold merchandise to batson co. on account, $33,400, terms 2/15, n/45.\nb. the cost of the…
a. sampson co. sold merchandise to batson co. on account, $33,400, terms 2/15, n/45.\nb. the cost of the goods sold is $25,050.\nc. the batson co. paid the invoice within the discount period.\nassume that both sampson and batson use a perpetual inventory system and that sampson co. uses the net method of recording sales discounts.\nif no entry is required, select \no entry required\ and leave the amount boxes blank.\njournalize the entries that sampson company would record for the information above. if an amount box does not require an entry, leave it blank.\na.\n\nb.\n\nc.\n\njournalize the entries that batson company would record for the information above. if an amount box does not require an entry, leave it blank.\na.
Answer
Explanation:
Step1: Record sale by Sampson Co.
Under the net - method, the sales amount is recorded net of the discount. The discount rate is 2% and the invoice amount is $33,400. So the net sales amount is $33,400*(1 - 0.02)=$32,732. Debit: Accounts Receivable - Batson Co. $32,732 Credit: Sales $32,732
Step2: Record cost of goods sold by Sampson Co.
The cost of goods sold is $25,050. Debit: Cost of Goods Sold $25,050 Credit: Inventory $25,050
Step3: Record payment by Batson Co. within discount period for Sampson Co.
Since the payment is within the discount period, the full amount due is received. Debit: Cash $32,732 Credit: Accounts Receivable - Batson Co. $32,732
For Batson Co.:
Step4: Record purchase by Batson Co.
Debit: Inventory $32,732 Credit: Accounts Payable - Sampson Co. $32,732
Step5: Record payment by Batson Co. within discount period
Debit: Accounts Payable - Sampson Co. $32,732 Credit: Cash $32,732
Answer:
Sampson Co.: a. Debit: Accounts Receivable - Batson Co. $32,732; Credit: Sales $32,732 b. Debit: Cost of Goods Sold $25,050; Credit: Inventory $25,050 c. Debit: Cash $32,732; Credit: Accounts Receivable - Batson Co. $32,732
Batson Co.: a. Debit: Inventory $32,732; Credit: Accounts Payable - Sampson Co. $32,732 b. No entry required c. Debit: Accounts Payable - Sampson Co. $32,732; Credit: Cash $32,732