PARRISH 7-9 INVENTORY WITH DISCOUNTS-GROSS/NET Please show and explain how to arrive at the correct answer and explain the differences between the gross amount and the net amount accurately. Thank you in advance!! Problem: Greystoke, Inc. is owned by twin brothers. On most issues, they agree completely with each other. One particular problem is giving them trouble. Galen wants to use the gross method for recording pruchases of merchandise with discounts while Gordon thinks the only logical method is the net method. To help them resolve their problems, they need to see the information each method gives them and get some feedback on what they can learn from each method. For you to do: 1) Provide journal entries to record each activity for both the gross and net methods. Be sure to label the methods. The entries can be side by side for the two inventory methods. 2) Assume the brothers use the periodic inventory method. Transactions: Show Gross and Net5/2 Purchased and received %15,000 of merchandise terms 1/15, n/455/5 Returned merchandise with cost of $500 because we could not use it5/16 Paid for $10,000 of the merchandise6/12 Paid for remainder of the merchandise.
PARRISH 7-9 INVENTORY WITH DISCOUNTS-GROSS/NET
Please show and explain how to arrive at the correct answer and explain the differences between the gross amount and the net amount accurately. Thank you in advance!!
Problem:
Greystoke, Inc. is owned by twin brothers. On most issues, they agree completely with each other. One particular problem is giving them trouble. Galen wants to use the gross method for recording pruchases of merchandise with discounts while Gordon thinks the only logical method is the net method. To help them resolve their problems, they need to see the information each method gives them and get some feedback on what they can learn from each method.
For you to do: 1) Provide
Transactions: Show Gross and Net
5/2 Purchased and received %15,000 of merchandise terms 1/15, n/45
5/5 Returned merchandise with cost of $500 because we could not use it
5/16 Paid for $10,000 of the merchandise
6/12 Paid for remainder of the merchandise.
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