Slide13 - Returns Allowances and Discounts Suppose also...

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Unformatted text preview: Returns, Allowances, and Discounts - Suppose also that the company takes cash discounts of $5,000 on payment of the remaining $960,000 - $75,000 = $885,000 of payables. The summary journal entry is: Accounts payable 885,000 Cash discounts on purchases 5,000 Cash 880,000 - To calculate cost of goods sold, Cash Discounts on Purchases and Purchase Returns and Allowances are subtracted from Purchases ...
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