Appendix 1: Gross and net methods for sales discounts The following were selected from among the transactions completed by Strong Retail Group during August of the current year: Aug. 5. Sold merchandise on account to M. Quinn, $7,500, terms 2/10, n/30. The cost of the merchandise sold was $4,200. 9. Sold merchandise on account to R. Busch, $4,000, terms 1/10, n/30. The cost of the merchandise sold was $2,100. 15. Received payment on account for the sale of August 5 less the discount. 20. Sold merchandise on account to S. Mooney, $6,000, terms n/eom. The cost of the merchandise sold was $3,300. 25. Received payment on account for the sale of August 9. 31. Received payment on account for the sale of August 20. Date Account Debit Credit Aug. 5 5 6 9 15 20 220 25 25 31 b. Journalize the August transactions using the net method of recording sales discounts. If an amount box does not require an entry, leave it blank. Account Date Debit Credit Aug. 5 15 20 20 2215 25 25 c. What amount would be reported as sales on Strong Retail Group's August income statement using the gross method? Gross method d. What amount would be reported as sales on Strong Retail Group's August income statement using the net method? Net method