Respuesta :
Answer:
(A)
inventory 8,000 debit
account payable 8,000 credit
to record purchase ofthe merchandise on account
(B)
account payable 8,000 debit
inventory 80 credit
cash 7,920 credit
to record payment within discount period
Explanation:
(A)
The company will increase his inventory by the nominal, and declare the account payable (liability) with his supplier.
(B)
We write-off the account payable.
We record the cash paid.
discount 2% x 8,000 = 80
8,000 - 80 = 7,920 cash disbursement
The difference decrease the inventory because, we are on perpetual inventory, we adjust directly to inventory, we don't use a discount account.
Answer:
- DR: PURCHASES ACCOUNT - $8,000
CR: SUPPLIER ACCOUNT - $8,000
BEING PURCHASE OF $8,000 MERCHANDISE ON CREDIT BY TRAVIS COMPANY
- DR: SUPPLIER ACCOUNT - $160
CR: DISCOUNT RECEIVED ACCOUNT - $160
BEING DISCOUNT RECEIVED FROM SUPPLIER OF 2% ON PURCHASE DUE TO PAYMENT WITHIN 10 DAYS BY TRAVIS COMPANY.
- DR: SUPPLIER ACCOUNT - $7,840
CR: CASH/BANK ACCOUNT - $7,840
BEING PAYMENT TO SUPPLIER FOR MERCHANDISE WITHIN THE DISCOUNT PERIOD (10 DAYS) BY TRAVIS COMPANY.
Explanation:
THE SUPPLIER OFFERED TRAVIS COMPANY 2/10, NET 30 TERMS ON ITS PURCHASE. THIS MEANS THAT TRAVIS COMPANY WILL ENJOY A 2% (2%*$8,000=$160) DISCOUNT ON ITS PURCHASE IF IT PAYS WITHIN 10 DAYS OF THE DATE OF PURCHASE OR PAY THE FULL AMOUNT($8,000) IN 30 DAYS.
THE TRANSACTION INVOLVED 3 STAGES
- CREDIT PURCHASE
- TREATMENT OF DISCOUNT
- PAYMENT
THEREFORE, THE JOURNAL ENTRIES GIVEN IN THE ANSWER ABOVE EXPLAINS THE ACCOUNTING TREATMENT OF THE 3 STAGES.
