University - Year 2

Accounting

1.) FOB destination, freight collect

Accounts receivable 500,000

Freight out 10,000
Sales 500,000
Allowance for freight
charge 10,000
(To record sales)        
Cash 475,000
Sales discount 15,000
Allowance for freight charge 10,000
Accounts receivable 500,000
(To record collection within discount period)

2.) FOB destination, freight prepaid

Accounts receivable 500,000

Freight out 10,000
Sales 500,000
Cash 10,000
(To record sales)        
Cash 485,000
Sales discount 15,000
Accounts receivable 500,000
(To record collection within discount period)

3.) FOB shipping point, freight collect

Account receivable 500,000

Sale 500,000
(To record sales)        
Cash 485,000
Sales discount 15,000
Accounts receivable 500,000
(To record collection within discount period)

4.) FOB shipping point, freight prepaid

Accounts receivable 510,000

 Sales 500,000
Cash 10,000
(To record sales)        
Cash 495,000
Sales discount 15,000
Accounts receivable 510,000
(To record collection within discount period)