Answered

Westonci.ca is the ultimate Q&A platform, offering detailed and reliable answers from a knowledgeable community. Experience the ease of finding quick and accurate answers to your questions from professionals on our platform. Get immediate and reliable solutions to your questions from a community of experienced professionals on our platform.

ABC Co. purchased merchandise on August 5 at a $1,000 invoice price with terms of 2/10,n/30 and paid for the merchandise on August 14. Determine its entry to record this purchase and the subsequent payment under both the gross method and the net method by matching the action on the left with the method on the right. (Assume a perpetual inventory system.)

Sagot :

abiolataiwo2015

Answer:

Credit Cash for $980 on August 14: Both methods

Debit Merchandise lnventoty for $980 on August 5: Net method

Credit Merchandise Inventory for $20 on August 14: Gross method

Debit Discounts Lost for $20 on August 14: Neither method

Explanation:

To Determine the entry to record this PURCHASE AND THE SUBSEQUENT PAYMENT under both the GROSS METHOD and the NET METHOD by matching the action on the left with the method on the right using a perpetual inventory system

Credit Cash for $980 on August 14: BOTH METHODS

(98%*$1,000)

Debit Merchandise lnventoty for $980 on August 5: NET METHOD

(98%*$1,000)

Credit Merchandise Inventory for $20 on August 14: GROSS METHOD

(2%*$1,000)

Debit Discounts Lost for $20 on August 14: NEITHER METHOD

(2%*$1,000)

We hope our answers were helpful. Return anytime for more information and answers to any other questions you may have. Thank you for visiting. Our goal is to provide the most accurate answers for all your informational needs. Come back soon. Westonci.ca is committed to providing accurate answers. Come back soon for more trustworthy information.