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st3a7th
Aug 28, 2013, 03:17 AM
10- sold merchandise on account to Martinez, $55,000. Terms 2/10, n/30
14- purchased merchandise on account from Shane, $54,400. Terms 2/10 n/30
17- sold on account to Bart, $40,000. Terms n/30
20- received full payment in cash from Martinez from his account on September 10.
24- paid full the account due to Shane on the 14th
27- received a 30 day non-interest bearing note form Baretto in settlement of his account on the 17th

pready
Aug 28, 2013, 11:53 AM
10 - Your accounts are Sales Revenue and Accounts Receivable

14 - Your accounts are Merchandise Inventory and Accounts Payable

17 - Your accounts are Sales Revenue and Accounts Receivable

20 - Your accounts are Cash, Sales Discount, and Accounts Receivable

24 - Your accounts are Accounts Payable, Purchase discount and Cash

27 - Your accounts are Notes Receivable and Accounts Receivable

For number 20 and 24 you will have to compute the amount of the discount. The basic formula is:
Interest = Principal * Rate * Time

So take the amount of sale or purchase * the percentage rate(first number in the three numbers that look like this 2/10, n30) * the number of days (the second number in the three numbers that look like this 2/10, n30) / 360 days(bankers rule)

The numbers in 2/10, n30 means this; the first number is percentage rate of the discount, the second number is the number of days in which the discount can be used or taken, the n number is the number of days the full payment must be made.