On December 1, 2016, Lynch Incorporated sold $17,000 of merchandise with terms 2/10, n/EOM. On...
70.2K
Verified Solution
Link Copied!
Question
Accounting
On December 1, 2016, Lynch Incorporated sold $17,000 of merchandise with terms 2/10, n/EOM. On December 11, 2016, collections were made on sales originally billed for $10,000, and on December 31, 2016, additional collections on sales originally billed for $6,000 were received.
| Required: | |
| 1. | Prepare the journal entries to record the sale, collections, and any required year-end adjustments assuming that Lynch records accounts receivable and sales at (a) the gross price and (b) the net price. |
| 2. | Next Level Assume that Lynchs customer does not have the available cash to pay Lynch within the discount period. How much interest should the customer be willing to pay for a loan to permit them to take advantage of the discount period (assume no additional costs to the loan)? |
| 3. | Next Level Explain why Lynchs granting of cash (sales) discounts may improve cash flow. |
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Best
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.