Santa Fe Company purchased merchandise for resale from Mesa Company with an invoice price of $26,900 and credit terms of 2/10, n/60. The merchandise had cost Mesa $18,346. Santa Fe paid within the discount period. Assume that both buyer and seller use a perpetual inventory system. 1. Prepare the entries that Mesa should record for the above transactions. Santa Fe Company purchased merchandise for resale from Mesa Company with an invoice price of $26,900 and credit terms of 2/10, n/60. The merchandise had cost Mesa $18,346. Santa Fe paid within the discount period. 2. Assume that the buyer borrowed enough cash to pay the balance on the last day of the discount period at an annual interest rate of 8% and paid it back on the last day of the credit period. Compute how much the buyer saved by following this strategy. (Use 365 days a year. Do not round intermediate calculations.)
Santa Fe Company purchased merchandise for resale from Mesa Company with an invoice price of $26,900 and credit terms of 2/10, n/60. The merchandise had cost Mesa $18,346. Santa Fe paid within the discount period. Assume that both buyer and seller use a perpetual inventory system. 1. Prepare the entries that Mesa should record for the above transactions. Santa Fe Company purchased merchandise for resale from Mesa Company with an invoice price of $26,900 and credit terms of 2/10, n/60. The merchandise had cost Mesa $18,346. Santa Fe paid within the discount period. 2. Assume that the buyer borrowed enough cash to pay the balance on the last day of the discount period at an annual interest rate of 8% and paid it back on the last day of the credit period. Compute how much the buyer saved by following this strategy. (Use 365 days a year. Do not round intermediate calculations.)
College Accounting (Book Only): A Career Approach
13th Edition
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:Scott, Cathy J.
Chapter9: Sales And Purchases
Section: Chapter Questions
Problem 8E: Toby Company had the following sales transactions for March: Mar. 6Sold merchandise on account to...
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Santa Fe Company purchased merchandise for resale from Mesa Company with an invoice price of $26,900 and credit terms of 2/10, n/60. The merchandise had cost Mesa $18,346. Santa Fe paid within the discount period. Assume that both buyer and seller use a perpetual inventory system. |
1. Prepare the entries that Mesa should record for the above transactions.
- Santa Fe Company purchased merchandise for resale from Mesa Company with an invoice price of $26,900 and credit terms of 2/10, n/60.
- The merchandise had cost Mesa $18,346.
- Santa Fe paid within the discount period.
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2. Assume that the buyer borrowed enough cash to pay the balance on the last day of the discount period at an annual interest rate of 8% and paid it back on the last day of the credit period. Compute how much the buyer saved by following this strategy. (Use 365 days a year. Do not round intermediate calculations.) |
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