Question
In: Accounting
1. The Stationery Company purchased merchandise on account from a supplier for $11,000, terms 1/10, n/30....
1. The Stationery Company purchased merchandise on account from a supplier for $11,000, terms 1/10, n/30. The Stationery Company returned merchandise with an invoice amount of $1,300 and received full credit.
a. If The Stationery Company pays the invoice
within the discount period, what is the amount of cash required for
the payment?
$___________________
b. Under a perpetual inventory system, what account is credited by The Stationery Company to record the return
Solutions
Expert Solution
a):- Cash required for payment within discount period = Net purchases on account - Discount on net purchases = Total purchases - Purchase return - Discount on net purchases
= $ 11000 -$1300 - { 1% of (11000-1300)}= $9700 - $97= $9603
b):- Under perpetual inventory system ," INVENTORY " Account are used to record the transaction of merchandise . therefore INVENTORY account will be credited to record the return of merchandise
ekkarill92 answered 2 years agoRelated Solutions
Sunland Company purchased merchandise on account from Office Suppliers for $68,000, with terms of 1/10, n/30....
Sunland Company purchased merchandise on account from Office
Suppliers for $68,000, with terms of 1/10, n/30. During the
discount period, Sunland returned some merchandise and paid $58,410
as payment in full. Sunland uses a perpetual inventory system.
Prepare the journal entries that Sunland Company made to record
the: (1) purchase of merchandise. (2) return of merchandise. (3)
payment on account. (Credit account titles are automatically
indented when the amount is entered. Do not indent manually.) No.
Account Titles and Explanation...
Purchased merchandise on account from Black Wholesale Supply for $8,000, terms 1/10, n/30. 2 Sold merchandise...
Purchased merchandise on account from Black Wholesale Supply
for $8,000, terms 1/10, n/30.
2
Sold merchandise on account for $4,800, terms 2/10, n/30. The
cost of the merchandise sold was $3,600.
5
Received credit from Black Wholesale Supply for merchandise
returned $500.
9
Received collections in full, less discounts, from customers
billed on May 2.
10
Paid Black Wholesale Supply in full, less discount.
11
Purchased supplies for cash $1,170.
12
Purchased merchandise for cash $4,030.
15
Received $299 refund...
Purchased inventory that cost $5,200 on account from Ross Company under terms 2/10, n/30. The merchandise...
Purchased inventory that cost $5,200 on account from Ross
Company under terms 2/10, n/30. The merchandise was delivered FOB
shipping point. Freight costs of $470 were paid in cash.
Returned $400 of the inventory it had purchased because the
inventory was damaged in transit. The seller agreed to pay the
return freight cost.
Paid the amount due on its account payable to Ross Company
within the cash discount period.
Sold inventory that had cost $5,700 for $8,700 on account,
under...
May 1 Purchased merchandise on account from Hilton Wholesale Supply for $7,600, terms 2/10, n/30. 2...
May 1
Purchased merchandise on account
from Hilton Wholesale Supply for $7,600, terms 2/10, n/30.
2
Sold merchandise on account for
$4,100, terms 3/10, n/30. The cost of the merchandise sold was
$3,500.
5
Received credit from Hilton
Wholesale Supply for merchandise returned $300.
9
Received collections in full, less
discounts, from customers billed on May 2.
10
Paid Hilton Wholesale Supply in
full, less discount.
11
Purchased supplies for cash
$840.
12
Purchased merchandise for cash
$2,840.
15
Received...
On June 10, Sheridan Company purchased $6,600 of merchandise from Crane Company, terms 4/10, n/30
On June 10, Sheridan Company purchased $6,600 of merchandise from Crane Company, terms 4/10, n/30. Sheridan Company pays the freight costs of $350 on June 11. Goods totaling $300 are returned to Crane Company for credit on June 12. On June 19, Sheridan Company pays Crane Company in full, less the purchase discount. Both companies use a perpetual inventory system. Prepare separate entries for each transaction on the books of Sheridan Company. (If no entry is required, select "No Entry" for...
Jan. 10. Purchased merchandise on account from Laine Co., $240,000, terms n/30. Feb. 9. Issued a...
Jan.
10.
Purchased merchandise on account from Laine Co., $240,000,
terms n/30.
Feb.
9.
Issued a 30-day, 4% note for $240,000 to Laine Co., on
account.
Mar.
11.
Paid Laine Co. the amount owed on the note of February 9.
May
1.
Borrowed $160,000 from Tabata Bank, issuing a 45-day, 5%
note.
June
1.
Purchased tools by issuing a $180,000, 60-day note to Gibala
Co., which discounted the note at the rate of 5%.
15.
Paid Tabata Bank the interest...
Aug. 1 Purchased merchandise from Abilene Company for $4,800 under credit terms of 1/10, n/30, FOB...
Aug. 1
Purchased merchandise from Abilene Company for $4,800 under
credit terms of 1/10, n/30, FOB destination, invoice dated August
1.
4
At Abilene's request, Stone paid $400 cash for freight charges
on the August 1 purchase, reducing the amount owed to
Abilene.
5
Sold merchandise to Lux Corp. for $3,360 under credit terms of
2/10, n/60, FOB destination, invoice dated August 5. The
merchandise had cost $2,399.
8
Purchased merchandise from Welch Corporation for $4,100 under
credit terms of...
Aug. 1 Purchased merchandise from Aron Company for $7,500 under credit terms of 1/10, n/30, FOB...
Aug. 1 Purchased merchandise from Aron Company for $7,500 under
credit terms of 1/10, n/30, FOB destination, invoice dated August
1. Aug. 5 Sold merchandise to Baird Corp. for $5,200 under credit
terms of 2/10, n/60, FOB destination, invoice dated August 5. The
merchandise had cost $4,000. Aug. 8 Purchased merchandise from
Waters Corporation for $5,400 under credit terms of 1/10, n/45, FOB
shipping point, invoice dated August 8. Aug. 9 Paid $125 cash for
shipping charges related to the...
Aug. 1 Purchased merchandise from Abilene Company for $4,800 under credit terms of 1/10, n/30, FOB...
Aug. 1
Purchased merchandise from Abilene Company for $4,800 under
credit terms of 1/10, n/30, FOB destination, invoice dated August
1.
4
At Abilene's request, Stone paid $400 cash for freight charges
on the August 1 purchase, reducing the amount owed to
Abilene.
5
Sold merchandise to Lux Corp. for $3,360 under credit terms of
2/10, n/60, FOB destination, invoice dated August 5. The
merchandise had cost $2,399.
8
Purchased merchandise from Welch Corporation for $4,100 under
credit terms of...
Aug. 1 Purchased merchandise from Arotek Company for $7,100 under credit terms of 1/10, n/30, FOB...
Aug.
1
Purchased merchandise from Arotek Company for $7,100 under
credit terms of 1/10, n/30, FOB destination, invoice dated August
1.
5
Sold merchandise to Laird Corp. for $4,970 under credit terms of
2/10, n/60, FOB destination, invoice dated August 5. The
merchandise had cost $3,549.
8
Purchased merchandise from Waters Corporation for $6,400 under
credit terms of 1/10, n/45, FOB shipping point, invoice dated
August 8. The invoice showed that at Sheng’s request, Waters paid
the $240 shipping charges...
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