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Question - On August 2 Chiefs Company sold merchandise to the Boise Potato Company in the amount of $6,500 with terms of 3/10 n/30, f.o.b. shipping. A separate invoice in the amount of $180 was received by Boise Potato Co. from the carrier for the freight. On August 12 Chiefs Co. received the money due for the merchandise purchased.
Required -
1) Prepare the journal entries for the sale and subsequent collection from the customer for Chiefs Co. using the gross method.
2) Prepare the journal entries for the sale and subsequent collection from the customer for Chiefs Co. using the net method.
3) Prepare the journal entry to record payment using the net method and assuming Boise did not pay the invoice due until August 25.
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