During 2019, Bava Technologies sold merchandise for a total of $800,000. The cost of merchandise to Bava was $560,000. Bava offers credit terms of 2/10, n/30 to encourage early payment. At year-end, there are $24,000 of sales still eligible for the 2% discount. Bava believes that all of the companies will pay within the discount period to receive the 2% discount. Assume Bava's fiscal year is December 31.
Bava's adjusting journal entry will include:
A) A debit to Sales Discounts for $480
B) A credit to Allowance for Sales Discounts for $4,800
C) A debit to Sales Discounts for $4,800
D) A credit to Sales Discounts for $480
E) No adjusting journal entry is required. Discount will be recognized when payment is received.
Correct Answer:
Verified
Q75: In 2019, Purple Eggplant incurred cost of
Q76: In 2019, Lemon Co. incurred cost of
Q77: In 2019, Arrow Co. incurred cost of
Q78: In 2019, Cumquat Co. incurred cost of
Q79: During 2019, Reed Corporation sold merchandise for
Q81: During 2019, Reed Corporation sold merchandise for
Q82: During 2019, Gleeson Technologies sold merchandise for
Q83: Belpre, Inc. owes $90,000 to William's Drones
Q84: Complete the grid to calculate Cost of
Q85: During 2019, Armstrong Technologies sold merchandise for
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents