Problem
On June 3rd, hunt company sold to Ann Mount merchandise having a sales prirmce of $15,000 with terms of 3/10, n / 60, f. O. B. Shipping point. An invoice totaling $110, terms n/ 30, was received by mount on June 8th from the Olympic Transport service for the freight costs. Upon receipt of the goods, June 5th, Mount notified hunt company that merchandise costing $700 contained flaws that rendered it worthless. The same day, hunt company issued a credit memo covering the worthless merchandise and ask that it be returned a company expense. The freight on the return merchandise was $22, paid by hunt company on June 7th. On June 12th, the company received the check for the balance due from Mount.
(a) Prepare journal entries for hunt company to record all the events noted above under each of the following bases.
(1) sales and receivables selling price.
6 / 3 there are two entries
6 / 5 there are two entries
6 / 7 there are two entries
6/12 there are three entries
(2) Sales and receivables are entered net of cash discounts.
6 / 3 there are two entries
6 / 5 there are two entries
6 / 7 there are two entries
6/12 there are two entries
(b) Prepare the journal entry under basis(2), assuming that an Mount did not remit payment until August 5th. There are three entries.