5-2 - Requirement 1: Prepare entries that the buyer should...

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Page 2 of 11 http://ezto.mhhm.mcgraw-hill.com/hm_accounting.tpx?todo=printview Requirement 3: 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. (Assume a 365-day year. Round your intermediate calculations and answers to 2 decimal places. Omit the "$" sign in your response.) Buyer's Net savings $ 277.81 Worksheet Learning Objective: 05-P1 Learning Objective: 05-P2 Fortuna Company purchased merchandise for resale from Lemar Company with an invoice price of $30,000 and credit terms of 2/10, n/60. The merchandise had cost Lemar $20,100. Fortuna paid within the discount period. Assume that both buyer and seller use a perpetual inventory system.
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Unformatted text preview: Requirement 1: Prepare entries that the buyer should record for the purchase and the cash payment. (Omit the "$" sign in your response.) Credit Purchase General Journal Debit Credit Merchandise Inventory 30,000 Accounts Payable 30,000 Cash Payment General Journal Debit Credit Accounts Payable 30,000 Merchandise Inventory 600 Cash 29,400 Requirement 2: Prepare entries that the seller should record for the sale and the cash collection. (Omit the "$" sign in your response.) Credit Sale General Journal Debit Credit Accounts Receivable 30,000 Sales 30,000 Cost of Goods Sold 20,100 Merchandise Inventory 20,100 Cash Collection General Journal Debit Credit Cash 29,400 Sales Discounts 600 Accounts Receivable 30,000 Requirement 3:...
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This note was uploaded on 08/09/2010 for the course ACCT 1 taught by Professor Ludwig during the Spring '10 term at Los Angeles City College.

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