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 1 year ago

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