In 1998, several states sued the major tobacco firms for failing to disclose the extent of health problems associated with cigarette smoking. Ultimately, the major tobacco companies agreed to pay approximately $250 billion over a 25-year period to the states. The payments each tobacco firm made are proportional to the number of cigarettes each firm sells over that period; essentially a per unit tax on cigarettes. Why did the tobacco companies favor this type of settlement instead of having to pay a fixed amount per firm

On june 3, teal company sold to chester company merchandise having a sale price of $2,600 with terms of 2/10, n/60, f.o.b. shipping point. an invoice totaling $91, terms n/30, was received by chester on june 8 from john booth transport service for the freight cost. on june 12, the company received a check for the balance due from chester company. prepare journal entries on the teal company books to record all the events noted above under each of the following bases. (1) sales and receivables are entered at gross selling price. (2) sales and receivables are entered at net of cash discounts.