Question

Rubin Enterprises had the following sales-related transactions on a recent day:
a. List price of services provided on credit was $18,150; terms 2/10, n/45.
b. Collected $3,650 in cash for services to be provided in the future.
c. The customer complained about aspects of the services provided in (a). To maintain a good relationship with this customer Rubin granted an allowance of $1,200 off the list price. The customer had not yet paid for the services.
d. Rubin provided the services for the customer in part (b). Additionally, Rubin granted an allowance of $250 because the services were provided after the promised date. Because the customer had already paid, Rubin paid the $250 allowance in cash.
Required:
1. Prepare the necessary journal entry (or entries) for each of these transactions.
2. What concerns would Rubin have assuming that their sales allowances for this period were significantly higher than in previous periods both in absolute turns and as a percentage of gross sales?


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  • CreatedSeptember 22, 2015
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