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Tracy Company, a manufacturer of air conditioners, sold 100 units to Thomas Company on November 17, 2011. The units have

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Tracy Company, a manufacturer of air conditioners, sold 100 units to Thomas Company on November 17, 2011. The units have a list price of $600 each, but Thomas was given a 30% trade discount. The terms of the sale were 2/10, n/30.

Required:
1. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2011, assuming that the gross method of accounting for cash discounts is used.
2. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on December 15, 2011, assuming that the gross method of accounting for cash discounts is used.
3. Repeat requirements 1 and 2 assuming that the net method of accounting for cash discounts is used.

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Requirement 1 Sales price 100 units x 600 60 000 x 70 42 000 November 17 …View the full answer


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Pushpinder Singh
Currently, I am PhD scholar with Indian Statistical problem, working in applied statistics and real life data problems. I have done several projects in Statistics especially Time Series data analysis, Regression Techniques. I am Master in Statistics from Indian Institute of Technology, Kanpur. I have been teaching students for various University entrance exams and passing grades in Graduation and Post-Graduation.I have expertise in solving problems in Statistics for more than 2 years now.I am a subject expert in Statistics with Assignmentpedia.com.
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Related Book For  answer-question
Intermediate Accounting

Intermediate Accounting

ISBN: 978-0077400163

6th edition

Authors: J. David Spiceland, James Sepe, Mark Nelson

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Question Details
Chapter # 7
Section: Exercises
Problem: 4
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Question Posted: July 02, 2013 05:22:56
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