How to do Journal Entry?
January cash receipts recorded in the December cash book totaled $45,640, of which $28,000 represents cash sales, and $17,640 represents collections on account for which cash discounts of $360 were given.
January cash disbursements recorded in the December check register liquidated accounts payable of $22,450 on which discounts of $250 were taken.
The ledger has not been closed for 2010.
The amount shown as inventory was determined by physical count on December 31, 2010.
The company uses the periodic method of inventory.