Presented below is information from Bramble Computers Incorporated. July 1Sold $20,000 of computers to Robertson Company with terms 3/15, n/60. Bramble uses the gross method to record cash discounts. Bramble estimates allowances of $1,300 will be honored on these sales. 10Bramble received payment from Robertson for the full amount owed from the July transactions. 17Sold $200,000 in computers and peripherals to The Clark Store with terms of 2/10, n/30. 30The Clark Store paid Bramble for its purchase of July 17. Prepare the necessary journal entries for Perez Computers.

Answer and Explanation:

The journal entries are shown below:

On July 1

Account receivable $20,000

          To Sales revenue $20,000

(Being sales is recorded)  

Sales return and allowance  $1,300  

      To Allowance for sales returns and allowance$1,300

(Being the estimation of the sales return is recorded)  

On July 1

Cash ($20,000 × 97%) $19,400

Sales discount $600

       To Account receivable  $20,000

(being cash is recorded)

On July 17

Account receivable $200,000

       To Sales revenue  $200,000

(Being account receivable is recorded)

On July 30

Cash $200,000

       To Account receivable $200,000

(Being cash is recorded)

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