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 net method is used.
Alpha Company purchased on account $2,600 of merchandise from Bravo Company on May 2, 2016.
Alpha Company returned, to Bravo Company, $250 of this merchandise on May 3, 2016.
Freight charges related to this transaction of $150 were paid by Bravo Company.
Use this information to prepare the compound General Journal entry (without explanation) for the payment for merchandise on May 15. If no entry is required then write "No Entry Required."
The term, net method, is one of the methods of recording purchases. In this method, purchases are recorded at net amount meaning the cost of purchases is measured at net of cash discounts allowable whether taken or not.
Answer and Explanation: 1
Use this information to prepare the compound General Journal entry (without explanation) for the payment for merchandise on May 15. If no entry is...
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fromChapter 6 / Lesson 3
Learn about inventory cost and see how the different types of inventory costs are broken down. Study the ordering cost, shortage cost, and carrying cost definitions.