Lambert Corporation sells merchandise at a list price of $70,000

Lambert Corporation sells merchandise at a list price of $70,000 with accompanying terms of 2/10, n/30 on December 8, 2016. By December 18, 2016, Lambert had collected from customers for merchandise originally billed at $46,000. By December 31, 2016, additional collections had been received on sales originally billed for $18,000, and sales returns and allowances of $1,500 had been granted by Lambert. By January 15, 2017, all the remaining balances due had been collected.
Required:
1. Prepare the journal entries to record each of the following items assuming that Lambert records accounts receivable and sales at the gross price:
a. The sale of the merchandise
b. Collections received by December 18, 2016
c. Collections received by December 31, 2016
d. Sales returns and allowances (not estimated in the period of sale)
c. Any required year-end adjustments
f. Any January 1, 2017, reversing entries
g. The collections received by January 15, 2017
2. Prepare the journal entries to record each of the following items assuming that Lambert records accounts receivable and sales at the net price:
a. The sale of the merchandise
b. Collections received by December 18, 2016
c. Collections received by December 31, 2016
d. Sales returns and allowances (not estimated in the period of sale)
e. Any required year-end adjustments
f. Any January 1, 2017, reversing entries
g. The collections received by January 15, 2017
3. Calculate the accounts receivable balance that would be reported on Lambert’s December 31, 2016, balance sheet if accounts receivable and sales were recorded at
(a) The gross price and
(b) The net price.
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...