Citron Mechanical Systems makes all sales on credit, with terms 1/15, n/30. During 2011, the list price (prediscount) of services provided was $687,500. Customers paid $482,000 (list price) of these sales within the discount period and the remaining $205,500 (list price) after the discount period. Citron uses the gross method of recording sales.
Required:
1. Compute the amount of sales that Citron recorded for 2011.
2. Compute the amount of cash that Citron collected from these sales.
3. Prepare a summary journal entry to record these sales and a second summary entry to record the cash collected.