Return to question Part 1 of 2 Required information Exercise 8-11 (Static) Trade and purchase discounts;…
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Question “Return to question Part 1 of 2 Required information Exercise 8-11 (Static) Trade and purchase discounts;…”
Return to question Part 1 of 2 Required information Exercise 8-11 (Static) Trade and purchase discounts; the gross method and the net method compared (LO8-3) The following information applies to the questions displayed below.) points Tracy Company, a manufacturer of air conditioners, sold 100 units to Thomas Company on November 17, 2021. The units have a list price of $500 each, but Thomas was given a 30% trade discount. The terms of the sale were 2/10, 1/30 Thomas uses a perpetual inventory system. Exercise 8-11 (Static) Parts 1 and 2 Required: 1. Prepare the journal entries to record the (a) purchase by Thomas on November 17 and (b) payment on November 26, 2021. Thomas uses the gross method of accounting for purchase discounts. 2. Prepare the journal entry for the payment, assuming instead that it was made on December 15, 2021. Answer is not complete. Complete this question by entering your answers in the tabs below. Required i Required 2 Prepare the journal entry for the payment, assuming instead that it was made on December 15, 2021. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)
Return to question Thomas uses a perpetual Inventory system. Exercise 8-11 (Static) Parts 1 and 2 Part 1 of 2 Required: 1. Prepare the journal entries to record the (a) purchase by Thomas on November 17 and (b) payment on November 26, 2021. Thomas uses the gross method of accounting for purchase discounts. 2. Prepare the journal entry for the payment, assuming instead that it was made on December 15, 2021. points X Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entry for the payment, assuming instead that it was made on December 15, 2021. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.) No Date General Journal Debit Credit 1 December 15, 202 Accounts payable 35,000 Interest expense Cash 700 X 34,300 X < Required 1
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Return to question Required information Exercise 8-11 (Static) Trade and purchase discounts; the gross method and the net method compared (LO8-3) The following information applies to the questions displayed below.) Part 2 of 2 Tracy Company, a manufacturer of air conditioners, sold 100 units to Thomas Company on November 17, 2021. The units have a list price of $500 each, but Thomas was given a 30% trade discount. The terms of the sale were 2/10, n/30. Thomas uses a perpetual inventory system. points Exercise 8-11 (Static) Part 3 3. Prepare the journal entries to record the purchase by Thomas on November 17 and payment on November 26, 2021 and December 15, 2021 using the net method of accounting for purchase discounts. Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 34 Reg 3D Prepare the journal entry for the payment, assuming instead that it was made on December 15, 2021. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.) No Date General Journal Debit Credit < ReqSA ReqSB >
Answer
Prerequisite 1:
Date | Account title and explanation | Debit | Credit |
Nov 17 | Inventory | $35,000 | |
Accounts payable (100x ($500x 0.70). | $35,000 | ||
[To register inventory purchases on account] | |||
Nov 26 | Accounts payable | $35,000 | |
Inventory [35,000 x 2.2%] | $700 | ||
Cash | $34,300 | ||
[To pay accounts payable] |
2nd Requirement:
Date | Account title and explanation | Debit | Credit |
Dec 15 | Accounts payable | $35,000 | |
Cash | $35,000 | ||
[To pay accounts payable] |
*Given Terms 2/10, No Discount was applied because it was paid after ten days (i.e. on Dec 15.
3A:
Date | Account title and explanation | Debit | Credit |
Nov 17 | Inventory [35,000 x 0.98] | $34,300 | |
Accounts payable | $34,300 | ||
[To register inventory purchases on account] |
*Inventory should be recorded at the net amount, which is after discount.
Requirement
3B:
Date | Account title and explanation | Debit | Credit |
Nov 26 | Accounts payable | $34,300 | |
Cash | $34,300 | ||
[To pay accounts payable] |
Conclusion
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