Alpha Company used the periodic inventory system for purchase & sales of merchandise. Discount...
Question:
Alpha Company used the periodic inventory system for purchase & sales of merchandise. Discount terms for both purchase & sales are, FOB Destination, 2/10, n30 and the gross method is used.
I. Alpha Company purchased on account $2,600 of merchandise from Bravo Company on May 2, 2016.
II. Alpha Company returned, to Bravo Company, $300 of this merchandise on May 3, 2016.
III. Freight charges related to this transaction of $150 were paid by Bravo Company.
Use this information to prepare Alpha Company's General Journal entries (without explanation) for May 2 & May 3 entries. If no entry is required then write "No Entry Required."
Periodic Inventory System
Periodic inventory system uses when the inventories are with the same identity, cannot distinguish with each other and the volume is high. It also uses the account purchases for each inventory bought for resale.
Answer and Explanation: 1
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View this answerAll of the transactions will be recorded in the books of Alpha Company, except for the freight that paid by Bravo Company, irrelevant to our problem...
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Perpetual and Periodic Inventory Systems
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