227National Park. Theand close the slareevision. Last yeac.ent year, the busiPROBLEM 5.7ProemMerchandising Transactionsiing is a series of related transactions between Texas Wholesale Corp, and Boot Hill, aTexas Wholesale Corp. sold Boot Hill 100 pairs of boots on account, tems 1/10. n/30.The cost of these boots to Texas Wholesale was 532 per pair, and the sales price wasLO 3, 7chain of retal stores:Feb. 912 L'nited Express charged S162 for delivering this merchandise to Boot Hill. Thesecharges were split evenly between the buyer and seller, and were paid immediately inS50 per pair.A i Boot Hill returned 10 pairs of boots to Texas Wholesale because they were the wrongrvle. Texas Wholesale allowed Boot Hill full credit for this return,stem.cashuch as a Searsa. 19 Boot Hill paid the remaining balance due to Texas Wholesale within the discountperiod.nterested inBoch companies use a perpetual inventory system.mounted toarchase andInstructionsResurd this series of transactions in the general journal of Texas Wholesale Corp. (The com-pany records sales at gross sales price.)A Record this series of transactions in the general journal of Boot Hill. (The company recordspurchases of merchandise at ner cost and uses a Transportation-in account to record trans-portation charges on inbound shipments.)c Boot Hill does not always have enough cash on hand to pay for purchases within the discountperiod. However, it has a line of credit with its bank, which enables Boot Hill to easily bor-row mooey for short periods of time at an annual interest rate of 9%, (The bank charges in-terest only for the number of days until Boot Hill repays the loan.) As a matter of general pol-icy, should Boot Hill take advantage of 1/10. n/30 cash discounts even if it must borrow themoney to do so at an annual rate of 9%? Explain fully-and illustrate any supporting com-putations.000.30 daysRIses thecost ofFes the

Feb. 9 - sold Boot Hill 100 pairs of boots on account, terms 1/10. n/30. Cost $32, sales price $50…

Pron 227 ies ia series of related transactions between Texas Wholesale Corp, and Boot Hill a PROBLEM 5.7 chain of retail stores: Merchandising Transactions Taxat Wholesale Corp. sold Boot Hill 100 pairs of boots on account, terms 1/10, n/30. De cost of these boots to Texas Wholesale was $32 per pair, and the sales price was Feb. 9 LO 3, 7 S50 per pair. A12 United Express charged $162 for delivering this merchandise to Boot Hill. These charges were split evenly between the buyer and seller, and were paid immediately in cash. SA I1 Boot Hill returned 10 pairs of boots to Texas Wholesale because they were the wrong yle. Texas Wholesale allowed Boot Hill full credit for this return, Pà 19 Boot Hill paid the remaining balance due to Texas Wholesale within the discount period. Boch companies use a perpetual inventory system. Instructions Resord this series of transactions in the general journal of Texas Wholesale Corp. (The com- puny records sales at gross sales price.) A Record this series of transactions in the general journal of Boot Hill. (The company records purchases of merchandise at net cost and uses a Transportation-in account to record trans- portation charges on inbound shipments.) - Boot Hill does not always have enough cash on hand to pay for purchases within the discount period. However, it has a line of credit with its bank, which enables Boot Hill to easily bor- row mooey for short periods of time at an annual interest rate of 9%, (The bank charges in- terest only for the number of days until Boot Hill repays the loan.) As a matter of general pol- icy, should Boot Hill take advantage of 1/10, n/30 cash discounts even if it must borrow the money to do so at an annual rate of 9%? Explain fully-and illustrate any supporting com- putations.

11th Edition

ISBN:9781337680059

Author:Gilbertson

Publisher:Gilbertson

Chapter20: Accounting For Inventory

Section: Chapter Questions

Problem 1MP