Questions: Journalize the following sales transactions for Ashli Boats. Explanations are not required. Mar. 1 Ashli Boats sold 250,000 of boats on account, credit terms are 4 / 15, n / 30 to Wild River Unlimited. Cost of goods is 100,000. Mar. 12 Ashli Boats receives payment from Wild River Unlimited on the amount due, less the discount. (Record debits first, then credits. Exclude explanations from journal entries. Assume the company uses a perpetual inventory system and records sales at the gross amount.)

Journalize the following sales transactions for Ashli Boats. Explanations are not required.
Mar. 1 Ashli Boats sold 250,000 of boats on account, credit terms are 4 / 15, n / 30 to Wild River Unlimited. Cost of goods is 100,000.
Mar. 12 Ashli Boats receives payment from Wild River Unlimited on the amount due, less the discount.
(Record debits first, then credits. Exclude explanations from journal entries. Assume the company uses a perpetual inventory system and records sales at the gross amount.)

Transcript text: Journalize the following sales transactions for Ashli Boats. Explanations are not required. Mar. 1 Ashli Boats sold $\$ 250,000$ of boats on account, credit terms are $4 / 15, n / 30$ to Wild River Unlimited. Cost of goods is $\$ 100,000$. Mar. 12 Ashli Boats receives payment from Wild River Unlimited on the amount due, less the discount. (Record debits first, then credits. Exclude explanations from journal entries. Assume the company uses a perpetual inventory system and records sales at the gross amount.)

Solution

Solution Steps

Step 1: Calculate the sales discount

The sales terms are 4/15, n/30, which means that the customer gets a 4% discount if they pay within 15 days. The sale occurred on March 1st, and the customer paid on March 12th, which is within the discount period. The discount amount is $250,000 * 0.04 =$ 10,000

Step 2: Calculate the cash received

The customer paid the amount due less the discount. So, the cash received is $250,000 -$ 10,000 = $240,000.

Step 3: Journal Entry for March 12

The journal entry records the cash received, the sales discount taken, and the reduction in accounts receivable. Accounts receivable is credited for the original sale amount.

Final Answer:

| Date | Accounts | Debit | Credit | | :------ | :---------------------------------- | :------- | :------- | | Mar. 12 | Cash | $240,000 | | | | Sales Discounts |$ 10,000 | | | | Accounts Receivable—Wild River Unlimited | | $250,000 |

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