Med Labs has the following December 31, 2017, year-end unadjusted balances: Allo

Question

Med Labs has the following December 31, 2017, year-end unadjusted balances: Allowance for Sales Discounts, $0, and Accounts Receivable, $5,200. Of the $5,200 of receivab les, $1,100 are within a 3% discount period, meaning that it expects buyers to take $33 in future-period discounts arising from this period's sales. a. Prepare the December 31, 2017 year-end adjusting journal entry for future sales discounts. b. Assum e the same facts above and that there is a $5 year end unadjusted credit balance in the Allowance for Sales Discounts. Prepare the December 31, 2017, year-end adjusting journal entry for future sales discounts View transaction list Journal entry worksheet Record the adjusting journal entry for future sales discounts. Note: Enter debits before credits General Journal Debit Credit Dec 31 Record entry Clear entry View general journal

Explanation / Answer

Allowance for Sale discount 0 Accounts Receivable 5200 1100 3% discount period Future discounts 33 Debit Credit a Sales Discount 33 Allowance for sales discounts 33 b Sales Discount 28 (33-5) Allowance for sales discounts 28

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