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6 September, 01:27

A company purchased $2700 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $650 worth of merchandise. On July 12, it paid the full amount due. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the payment on July 12 is: Debit Accounts Payable $2050; credit Merchandise Inventory $41; credit Cash $2009. Debit Cash $2050; credit Accounts Payable $2050. Debit Accounts Payable $2700; credit Cash $2700. Debit Merchandise Inventory $2050; credit Cash $2050. Debit Accounts Payable $2050; credit Cash $2050.

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Answers (2)
  1. 6 September, 01:50
    0
    Debit Accounts Payable $2050; credit Merchandise Inventory $41; credit Cash $2009.

    Explanation:

    2.700 - 650 = 2,050 net sale

    commercial term: 2/10 2% within the first 10 days

    payment within discount period:

    2,050 x 2% discount = 41

    cash disbursement: 2,050 - 41 = 2,009

    we will write-off the account payable

    we credit cash by the disbusement amount

    and credit inventory as his cost decreased.
  2. 6 September, 01:54
    0
    Debit Accounts Payable $2050; credit Merchandise Inventory $41; credit Cash $2009

    Explanation:

    The journal entry is as follows

    On July 12

    Account payable Dr $2,050

    To Merchandise Inventory $41

    To Cash $2,009

    (Being the amount due is paid)

    The computation is shown below:

    For account payable

    = $2,700 - $650

    = $2,050

    For merchandise inventory

    = $2,050 * 2%

    = $41

    And, for cash it is

    = $2,050 - $41

    = $2,005
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