The following transactions were completed by LECHON Company during the month of August:

1. · August 3- Sold goods with list price of P600,000 to DEF Company under credit terms of 2/10, 1/15, n/30. Trade discounts granted are 5% and 3%.
2. · August 5- Sold goods worth P250,000 to GHI Company under credit terms 3/10, 2/15, 1/20, n/30.
3. · August 10- Sold goods worth P100,000 to JKL Company under credit terms 3/10, 2/15, 1/20, n/30.
4. · August 11- DEF Company returned defective goods worth P60,000.
5. · August 13- Collected the account of DEF Company in full.
6. · August 20- Collected the account of GHI Company in full.
7. · August 25- Sold goods worth P175,000 to MNO Company under credit terms 2/10, n/30.

Under the allowance method of accounting for cash discounts, how much cash was collected during August?

Answer rating: 100% (QA)

To calculate the amount of cash collected during August using the allowance method we need to determine the net amount due for each sale after any tra... View the full answer