- An entity sells inventory with a list price of P10,000 under credit terms of 20%, 10%, 2/15, n/30. The entity uses PFRS 15 and estimates that only 80% of the cash discount will be taken. By the end of the reporting period, the account receivable is not yet settled and the entity changes its estimate of cash discount to be taken to 40%. equirements: Provide the journal entry on the date of sale and the year-end adjusting entry.

- An entity sells inventory with a list price of P10,000 under credit terms of 20%, 10%, 2/15, n/30. The entity uses PFRS 15 and estimates that only 80% of the cash discount will be taken. By the end of the reporting period, the account receivable is not yet settled and the entity changes its estimate of cash discount to be taken to 40%. equirements: Provide the journal entry on the date of sale and the year-end adjusting entry.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 5RE: Dani Corporation signed a binding commitment on December 2 to purchase inventory for 300,000 cash on...

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Discounts Nelson Company bought inventory for 50,000 on terms of 2/15, n/60. It pays for the first 37,500 of inventory purchased within the discount period and pays for the remaining 12,500 two months later. Required: 1. Prepare the journal entries to record the purchase and the payment under both the (a) gross price and (b) net price methods. Assume that Nelson uses the periodic inventory system. 2. Next Level Which of the two methods yields a conceptually preferable valuation of inventory?
An entity sells inventory with a list price of P10,000 under credit terms of 20%, 10%, 2/15, n/30. The entity uses PFRs 15 and estimates that only 80% of the cash discount will be taken. By the end of the reporting period, the account receivables are not yet settled and the entity changes its estimate of cash discount to be taken by 40%. Requirements: Provide the journal entry on the date of the sale and the year-end adjusting entry. Determine the amounts of net revenue and accounts receivable to be reported in the financial statements.
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