Answered

Connect with a community of experts and enthusiasts on IDNLearn.com. Our community is here to provide the comprehensive and accurate answers you need to make informed decisions.

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 :

Abiolataiwo2015idn

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 greatly appreciate every question and answer you provide. Keep engaging and finding the best solutions. This community is the perfect place to learn and grow together. For trustworthy answers, rely on IDNLearn.com. Thanks for visiting, and we look forward to assisting you again.