Using the following data: 1. On April 5, purchased merchandise from Hansen Company for $27,000,...
Question:
Using the following data:
1. On April 5, purchased merchandise from Hansen Company for $27,000, terms 2/10, n/30.
2. On April 6, paid freight costs of $1,200 on merchandise purchased from Hansen Company.
3. On April 7, purchased equipment on account for $30,000.
4. On April 8, returned some of the April 5 merchandise to Hansen Company, which cost $3,600.
5. On April 15, paid the amount due to Hansen Company in full.
a) Prepare the journal entries to record these transactions on the books of Edyburn Co. using a periodic inventory system.
b) Assume that Edyburn Co. paid the balance due to Hansen Company on May 4 instead of April 15. Prepare the journal entry to record this payment.
Periodic Inventory:
In the periodic inventory system, the inventory is valued only at the end of the financial year. The company performs physical counting of the remaining goods to determined ending inventory as well as COGS.
Answer and Explanation: 1
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Net purchases = Total amount due to H Company - Purchase returns
Net purchases = 27,000 - 3,600
Net purchases = $23,400
Discount received =...
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