Supermarkets Super Cash and Carry bought merchandise on credit from its suppliers for $100,000, with terms of 2/10, n/30

Marketing Dec 20, 2020

Supermarkets Super Cash and Carry bought merchandise on credit from its suppliers for $100,000, with terms of 2/10, n/30. The company returned $10,000 in damaged merchandise for which it received a credit.

a. What transaction must be registered if the supermarket pays the invoice within the period that includes the discount?

b. Determine the entry and the amount that will be registered to acknowledge the return.

General JournalAccountDebitCredit

Expert Solution

Sales	100,000
Sales Returns	10,000
Net Sales	90,000
Discounted Rate	98%
Cash Collections	88,200

Accounts Receivables	100,000
Sales		100,000
To record the sale.

Sales Returns and Allowances	10,000
Accounts Receivables		10,000
To record the sales return.

Cash	88,200
Sales Discount	1,800
Accounts Receivables		90,000
To record the collection.

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