Chapter_5_Student

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Unformatted text preview: SO 2 Explain the recording of purchases under a perpetual inventory system. Recording Purchases of Merchandise Recording Purchases of Merchandise E5-2 Continued Prepare the journal entry to record the transaction Continued under a perpetual inventory system. 4. On April 8, returned damaged merchandise to Bryant Company and was granted a $4,000 credit for returned merchandise. April 8 Chapter 5-13 SO 2 Explain the recording of purchases under a perpetual inventory system. Recording Purchases of Merchandise Recording Purchases of Merchandise Recording Purchase Discounts Credit terms may permit buyer to claim a cash discount for prompt payment. Advantages: Purchaser saves money. Seller shortens the operating cycle. Example: Credit terms of 2/10, n/30, is read “two­ten, net thirty.” 2% cash discount if payment is made within 10 days. Chapter 5-14 SO 2 Explain the recording of purchases under a perpetual inventory system. Recording Purchases of Merchandise Recording Purchases of Merchandise E5-2 Continued Prepare the journal entry to record the transaction Continued under a perpetual inventory system. 5. On April 15, paid the amount due to Bryant Company in full. (Discount = $21,000 x 2% = $500) April 15 Chapter 5-15 SO 2 Explain the recording of purchases under a perpetual inventory system. Recording Purchases of Merchandise Recording Purchases of Merchandise E5-2 Continued Prepare the journal entry to record the transaction Continued under a perpetual inventory system. 5. On April 15, paid the amount due to Bryant Company in full. What entry would be made if the company failed to pay within 10 days? April 16 or later Chapter 5-16 SO 2 Explain the recording of purchases under a perpetual inventory system. Recording Purchases of Merchandise Recording Purchases of Merchandise Summary of Purchasing Transactions E5-2 Merchandise I nvent ory Debit 5th ­ Purchase 6th – Freight­in Balance Chapter 5-17 $25,000 900 Credit $4,000 420 8th ­ Return 15th ­ Discount $21,480 SO 2 Explain the recording of purchases under a perpetual inventory system. Recording Sales of Merchandise Recording Sales of Merchandise Made for cash or credit (on account). Illustration 5­4 Normally recorded when earned, usually when goods transfer from seller to buyer. Sales invoice should support each credit sale. Chapter 5-18 SO 3 Explain the recor...
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