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Tradewinds Company sold 100 fans to Windwards Company on November 17, 2015. The fans has a list price of $500 each, but Windwards was given a 30% trade discount. The terms of the sale were 2/10, n/30.

(A) Prepare the journal entry to record the sale on November 17th (ignore cost of goods sold) assuming the gross method of accounting for cash discounts is used.

(B) Prepare the journal entry to record payment on November 26, 2015 assuming the gross method of accounting for cash discounts is used.

(C) Prepare the journal entry to record the sale on November 17th (ignore cost of goods sold) assuming the net method of accounting for cash discounts is used.

(D) Prepare the journal entry to record payment on November 26, 2015 assuming the net method of accounting for cash discounts is used.

(E) Assume payment was not made on November 26th was not made. Instead payment was made on December 3, 2015. Prepare the journal entry to record the payment assuming the net method of accounting for cash discounts is used.

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M92169322

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