On July 15, 2021, the Nixon Car Company purchased 2,800 tires from the Harwell Company for $35 each. The terms of the sale were 2/10, n/30. Nixon uses a perpetual inventory system and the net method of accounting for purchase discounts. a. Prepare the journal entries to record the purchase on July 15 and payment on July 23, 2021. b. Prepare the journal entry for the payment, assuming instead that it was made on August 15, 2021. c.If Nixon instead uses a periodic inventory system, explain any changes to the journal entries created in requirements 1 and 2. The July 15th entry would include a debit to the ________ account instead of to ___________.
On July 15, 2021, the Nixon Car Company purchased 2,800 tires from the Harwell Company for $35 each. The terms of the sale were 2/10, n/30. Nixon uses a perpetual inventory system and the net method of accounting for purchase discounts. a. Prepare the journal entries to record the purchase on July 15 and payment on July 23, 2021. b. Prepare the journal entry for the payment, assuming instead that it was made on August 15, 2021. c.If Nixon instead uses a periodic inventory system, explain any changes to the journal entries created in requirements 1 and 2. The July 15th entry would include a debit to the ________ account instead of to ___________.
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 9RE: RE7-8 Johnson Company uses a perpetual inventory system. On October 23, Johnson purchased 100,000 of...
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On July 15, 2021, the Nixon Car Company purchased 2,800 tires from the Harwell Company for $35 each. The terms of the sale were 2/10, n/30. Nixon uses a perpetual inventory system and the net method of accounting for purchase discounts.
a. Prepare the journal entries to record the purchase on July 15 and payment on July 23, 2021.
b. Prepare the journal entry for the payment, assuming instead that it was made on August 15, 2021.
c.If Nixon instead uses a periodic inventory system, explain any changes to the journal entries created in requirements 1 and 2.
The July 15th entry would include a debit to the ________ account instead of to ___________.
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