Netherland Corporation Has the Following Unadjusted Balances: Accounts Receivable,$80,000 (Debit),and

question 93

Multiple Choice

Netherland Corporation has the following unadjusted balances: Accounts Receivable,$80,000 (debit) ,and Allowance for Sales Discounts $300 (credit) .Of the receivables,$50,000 of them are within the 2% discount period,and Netherland expects buyers to take $1,000 in future-period discounts ($50,000 × 2%) arising from this period's sales.The adjusting entry to estimate sales discounts is (are) :

• A) \[\begin{array} { | l | r | l | }
• \hline \text { Accounts Receivable } & 80,000 & \\
• \hline \text { Sales } & & 80,00 \mathrm { C } \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | r | }
• \hline \text { Sales Discounts } & 50,000 & \\
• \hline \text { Sales } & & 50,000 \\
• \hline \text { Cost of Goods Sold } & 1,000 & \\
• \hline \text { Inventory Returns Estimated } & & 1,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Sales Discounts } & 700 & \\
• \hline \text { Allowance for Sales Discounts } & & 700 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Sales Discounts } & 1,000 & \\
• \hline \text { Accounts receivable } & & 1,000 \\
• \hline
• \end{array}\]
• E) \[\begin{array} { | l | r | l | }
• \hline \text { Sales Discounts } & 1,000 & \\
• \hline \text { Allowance for Sales Discounts } & & 1,000 \\
• \hline
• \end{array}\]

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