# Delta Automotive Corporation h

Delta Automotive Corporation has the following assets listed inits 12/31/2021 trial balance:

 Cash in bank—checking account \$ 38,500 U.S. Treasury bills (mature in 60 days)* 6,000 Cash on hand (currency and coins) 2,950 U.S. Treasury bills (mature in six months)* 26,000 Undeposited customer checks 3,440

*Purchased on 11/30/21Required:1. Determine the correct balance of cash and cashequivalents to be reported in the current asset section of the 2021balance sheet.

2. Tracy Company, a manufacturer of air conditioners, sold 200units to Thomas Company on November 17, 2021. The units have a listprice of \$650 each, but Thomas was given a 30% trade discount. Theterms of the sale were 3/10, n/30.

3-a. Prepare the journal entries to record thesale on November 17 (ignore cost of goods) and collection onNovember 26, 2021, assuming that the net method of accounting forcash discounts is used.3-b. Prepare the journal entries to record thesale on November 17 (ignore cost of goods) and collection onDecember 15, 2021, assuming that the net method of accounting forcash discounts is used.

 1. Cash and cash equivalentsincludes: Cash in bank—checkingaccount \$38,500 U.S. treasury bills \$6,000 Cash on hand \$2,950 Undeposited customerchecks \$3,440 Total \$50,890 Journal 17-Nov Accounts receivable – ThomasCompany 91,000 Sales 91,000 26-Nov Cash 88,270 Sales discount 2,730 Accounts receivable – ThomasCompany 91,000 List price = \$650 perunit Trade discount = 30% = 650 x 30% = \$195 Selling price per unit = List price- Trade discount 650 – 195 = \$455 Total sales = Selling price perunit x Number of units sold = 455 x 200 = \$91,000
 Sales discount = Sales x Discountrate = 91,000 x 3/10 = \$2,730 Cash received from Thomas Company =Total sales – Sales discount = 91,000 – 2,730 = \$88,270 Journal 17-Nov Accounts receivable – ThomasCompany 91,000 Sales 91,000 15-Dec Cash 91,000 Accounts receivable – ThomasCompany 91,000

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