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EXERCISE 18-2 (15-20 minutes)

EXERCISE 18-2 (15-20 minutes)

(a)   1.    6/3     Accounts Receivable—Kim Rhode.............      5,000
                                  Sales..........................................................                       5,000

               6/5       Sales Returns and Allowances.................          400
                                    Accounts Receivable—Kim Rhode..                          400

               6/7       Transportation-Out.......................................            24
                                    Cash........................................................                             24

               6/12     Cash................................................................      4,508
                            Sales Discounts (2% X $4,600)..................            92
                                    Accounts Receivable—Kim Rhode..                       4,600

        2.    6/3       Accounts Receivable—Kim Rhode..........      4,900
                                    Sales [$5,000 – (2% X 5,000)].............                       4,900

               6/5       Sales Returns and Allowances.................          392
                                    Accounts Receivable—Kim Rhode..                          392
                                         [$400 – (2% x $400)]

               6/7       Transportation-Out.......................................            24
                                    Cash........................................................                             24

               6/12     Cash................................................................      4,508
                            Accounts Receivable—Kim Rhode..........                       4,508

(b)          8/5       Cash................................................................      4,600
                                    Accounts Receivable—Kim Rhode..                       4,508
                                    Sales Discounts Forfeited..................                             92
                                         (2% X $4,600)



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