PARRISH 7-11 RECORDING INVENTORY WITH DISCOUNTS AVAILABLE NET/GROSSPLEASE READ BELOW AND SOLVE THE FOLLOWING a) and b) questions  ***Please answer accurately and thoroughly^***As a consultant, you specialize in helping companies decide which accounting method to use.  Your client Megabucks Company, has just started business.  The owners want to know how to use the gross and net methods to record purchases.  Megabucks also wants to know which method is best to use. Megabucks uses the Periodic system.a) Prepare the journal entries under the gross and net methods for the following situtations10/3 Purchased and received $10000 of merchandise terms 2/10, n/3010/6 Returned defective mechandise with cost of $60010/12 Paid $8000 of the merchandise11/1 Paid for the remainder of the merchandise b) Describe which method has the most information for management and why that method is more informative

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Asked Feb 13, 2020
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PARRISH 7-11 RECORDING INVENTORY WITH DISCOUNTS AVAILABLE NET/GROSS

PLEASE READ BELOW AND SOLVE THE FOLLOWING a) and b) questions  ***Please answer accurately and thoroughly^***

As a consultant, you specialize in helping companies decide which accounting method to use.  Your client Megabucks Company, has just started business.  The owners want to know how to use the gross and net methods to record purchases.  Megabucks also wants to know which method is best to use. Megabucks uses the Periodic system.

a) Prepare the journal entries under the gross and net methods for the following situtations

10/3 Purchased and received $10000 of merchandise terms 2/10, n/30

10/6 Returned defective mechandise with cost of $600

10/12 Paid $8000 of the merchandise

11/1 Paid for the remainder of the merchandise 

b) Describe which method has the most information for management and why that method is more informative

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Expert Answer

a) Prepare the journal entries under the gross and net methods:

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