# Purchase-related transactions The debits and credits for four related entries for a purchase of $40,000, terms 2/10, n/30, are presented in the following T accounts. Describe each transaction. Cash Accounts Payable (2) 450 (3) 4,900 (1) 39,200 (4) 34,300 (4) 34,300 Merchandise Inventory (1) 39,200 (3) 4,900 (2) 450 BuyFind ### Accounting 27th Edition WARREN + 5 others Publisher: Cengage Learning, ISBN: 9781337272094 BuyFind ### Accounting 27th Edition WARREN + 5 others Publisher: Cengage Learning, ISBN: 9781337272094 #### Solutions Chapter Section Chapter 6, Problem 6.6EX Textbook Problem ## Purchase-related transactionsThe debits and credits for four related entries for a purchase of$40,000, terms 2/10, n/30, are presented in the following T accounts. Describe each transaction. Cash Accounts Payable (2) 450 (3) 4,900 (1) 39,200 (4) 34,300 (4) 34,300 Merchandise Inventory (1) 39,200 (3) 4,900 (2) 450

Expert Solution

(1)

To determine

Purchases is an activity of acquiring the merchandise inventory of a business.

To Describe: The purchase of merchandise inventory on account under the terms of 2/10, n/30.

### Explanation of Solution

Describe the purchase of merchandise inventory on account.

 Date Account Title and Explanation Post Ref. Debit ($) Credit ($) Merchandise Inventory 39,200 Accounts Payable 39,200 (1) (To record purchases of inventory on account after discount)

Table (1)

Working Note:

Calculate the amount of accounts payable.

Purchases = \$40,000

Discount Percentage = 2%

Amount of accounts payable} = PurchasesDiscount=

Expert Solution

(2)

To determine

To Describe: The journal entry for freight charges paid.

Expert Solution

(3)

To determine

To Describe: The journal entry for purchase returned.

Expert Solution

(4)

To determine

To Describe: The journal entry for the due amount paid.

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