Hirsch Company buys inventory for $30,000 on terms of 1/10, n/30. It pays within the discount period. 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 Hirsch uses a periodic inventory system. 2. Prepare the journal entries to record the purchase and payment under both the (a) gross price and the (b) net price methods. Assume that Hirsch uses a perpetual inventory system. CHART OF ACCOUNTS Hirsch Company General Ledger ASSETS 111 Cash 121 Accounts Receivable 131 Inventory 142 Prepaid Insurance 181 Equipment 198 Accumulated Depreciation LIABILITIES 211 Accounts Payable 224 Interest Payable 231 Salaries Payable 241 Accrued Loss on Purchase Commitment EQUITY 311 Common Stock 331 Retained Earnings REVENUE 411 Sales Revenue EXPENSES 500 Cost of Goods Sold 510 Purchases 511 Purchase Returns and Allowances 512 Purchase Discounts Taken 513 Purchase Discounts Lost 514 Loss on Purchase Commitment 515 Recovery of Accrued Loss on Purchase Commitment 521 Salaries Expense 525 Interest Expense 532 Bad debt Expense 534 Insurance Expense 536 Utilities Expense 539 Miscellaneous Expenses 1a. Prepare the journal entries to record the purchase on March 14 and the payment on March 22 under the gross price method assuming a periodic inventory system. PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4 5 1b. Prepare the journal entries to record the purchase on March 14 and the payment on March 22 under the net price method assuming a periodic inventory system. PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4 2a. Prepare the journal entries to record the purchase on March 14 and the payment on March 22 under the gross price method assuming a perpetual inventory system. PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4 5 2b. Prepare the journal entries to record the purchase on March 14 and the payment on March 22 under the net price method assuming a perpetual inventory system. PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4
Hirsch Company buys inventory for $30,000 on terms of 1/10, n/30. It pays within the discount period. 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 Hirsch uses a periodic inventory system. 2. Prepare the journal entries to record the purchase and payment under both the (a) gross price and the (b) net price methods. Assume that Hirsch uses a perpetual inventory system. CHART OF ACCOUNTS Hirsch Company General Ledger ASSETS 111 Cash 121 Accounts Receivable 131 Inventory 142 Prepaid Insurance 181 Equipment 198 Accumulated Depreciation LIABILITIES 211 Accounts Payable 224 Interest Payable 231 Salaries Payable 241 Accrued Loss on Purchase Commitment EQUITY 311 Common Stock 331 Retained Earnings REVENUE 411 Sales Revenue EXPENSES 500 Cost of Goods Sold 510 Purchases 511 Purchase Returns and Allowances 512 Purchase Discounts Taken 513 Purchase Discounts Lost 514 Loss on Purchase Commitment 515 Recovery of Accrued Loss on Purchase Commitment 521 Salaries Expense 525 Interest Expense 532 Bad debt Expense 534 Insurance Expense 536 Utilities Expense 539 Miscellaneous Expenses 1a. Prepare the journal entries to record the purchase on March 14 and the payment on March 22 under the gross price method assuming a periodic inventory system. PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4 5 1b. Prepare the journal entries to record the purchase on March 14 and the payment on March 22 under the net price method assuming a periodic inventory system. PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4 2a. Prepare the journal entries to record the purchase on March 14 and the payment on March 22 under the gross price method assuming a perpetual inventory system. PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4 5 2b. Prepare the journal entries to record the purchase on March 14 and the payment on March 22 under the net price method assuming a perpetual inventory system. PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4
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 9E
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Hirsch Company buys inventory for $30,000 on terms of 1/10, n/30. It pays within the discount period.
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2. | Prepare the journal entries to record the purchase and payment under both the (a) gross price and the (b) net price methods. Assume that Hirsch uses a perpetual inventory system. |
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1a. Prepare the journal entries to record the purchase on March 14 and the payment on March 22 under the gross price method assuming a periodic inventory system.
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1b. Prepare the journal entries to record the purchase on March 14 and the payment on March 22 under the net price method assuming a periodic inventory system.
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2a. Prepare the journal entries to record the purchase on March 14 and the payment on March 22 under the gross price method assuming a perpetual inventory system.
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2b. Prepare the journal entries to record the purchase on March 14 and the payment on March 22 under the net price method assuming a perpetual inventory system.
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