On March 2, Ethan Ltd. sold $30,000 of inventory items, at cost of 13,500, on credit...

 

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On March 2, Ethan Ltd. sold $30,000 of inventory items, at cost of 13,500, on credit with the terms 2/10, net 30. Payment on $18,000 of sales was received on March 7 and the remaining payment on $12,000 was received on March 31. Ethan Ltd. uses perpetual inventory tracking. Required: a) Assuming Ethan uses the gross method of accounting for sales discounts, prepare the entry to be recorded on March 2, 7, and 31. b) Assuming Ethan uses the net method of accounting for sales discounts, prepare the journal entry to be recorded on March 2, 7, and 31. Part II: A trial balance before adjustment included the following: Accounts receivable. Allowance for doubtful accounts. Sales. Sales returns and allowances. Debit $120,000 730 8,000 Credit $510,000 Required: Give journal entries assuming that the estimate of uncollectibles is determined by taking a) 2.5% of gross accounts receivable, and b) 1.5% of net sales. On March 2, Ethan Ltd. sold $30,000 of inventory items, at cost of 13,500, on credit with the terms 2/10, net 30. Payment on $18,000 of sales was received on March 7 and the remaining payment on $12,000 was received on March 31. Ethan Ltd. uses perpetual inventory tracking. Required: a) Assuming Ethan uses the gross method of accounting for sales discounts, prepare the entry to be recorded on March 2, 7, and 31. b) Assuming Ethan uses the net method of accounting for sales discounts, prepare the journal entry to be recorded on March 2, 7, and 31. Part II: A trial balance before adjustment included the following: Accounts receivable. Allowance for doubtful accounts. Sales. Sales returns and allowances. Debit $120,000 730 8,000 Credit $510,000 Required: Give journal entries assuming that the estimate of uncollectibles is determined by taking a) 2.5% of gross accounts receivable, and b) 1.5% of net sales.

Answer rating: 100% (QA)

Answer 1 a On March 2 Inventory 13500 Accounts Receivable 30... View the full answer