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 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

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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Chapter 6 Solutions

Accounting
Show all chapter solutions
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