Alpha Company used the periodic inventory system for purchase and sales of merchandise. Discount...
Question:
Alpha Company used the periodic inventory system for purchase and sales of merchandise. Discount terms for both purchase and sales are, FOB Destination, 2/10, n30, and the gross method is used.
-Alpha Company purchased on account $2,700 of merchandise from Bravo Company on May 2, 2016.
-Alpha Company returned, to Bravo Company, $200 of this merchandise on May 3, 2016.
-Freight charges related to this transaction of $150 were paid by Bravo Company.
Use this information to make an example of Alpha Company's General Journal entry (without explanation) for the payment for merchandise on May 15. If no entry is required then write "No Entry Required."
Gross Price Method:
When a purchase is first entered into an organization's payables system, the gross price method records it at that price. The payables staff won't employ any early payment discounts in this approach.
Answer and Explanation: 1
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View this answerStatement showing journal entry for the payment:
| Date | Particulars | Debit | Credit |
| May 15 | Account Payable | $2,500 |
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What is Gross Price? - Definition & Formula
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Chapter 6 / Lesson 22
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Gross price is the total price of a product including any associated sales tax or other costs. Learn about the definition and formula of gross price, distinguish gross price from net price, and check out examples of calculating the gross price.
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