Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Question
Chapter 10, Problem 10.3BE
To determine
The cash payment and reduction of inventory on October 25 as well as the account payable after 25 October payment as per gross payment method.
Given information:
S purchases 80 parkas at $75 each on October 16.
Discount term are 2/10, n/30.
S paid 60 parkas on October 25 and availed the benefit of purchases discount.
Balance 20 parkas, payment is made on November 15.
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Students have asked these similar questions
Merchandise invoiced at $8,900 is sold on terms 1/10, n/30. If the buyer pays within the discount period, what amount will be reported on the income statement as net sales?
Based on the following information, what would be recorded as purchases discount if the invoice is paid within the discount period?
1.
$5,000 of merchandise inventory was ordered on April 2, 20Y8.
2.
$2,000 of this merchandise was received on April 5, 20Y8.
3.
On April 6, 20Y8, an invoice dated April 4, 20Y8, with terms of 2/10, net 30 for $2,150, which included a $150 prepaid freight cost, was received.
4.
On April 10, 20Y8, $500 of the merchandise was returned to the seller.
a.$33
b.$30
c.$43
d.$100
Assume that a company records
purchases net of discount. If the
company bought merchandise valued
at P10,000 on credit terms 3/15, net
30, the entry to record a payment for
half of the purchase within discount
period would include a debit to *
Accounts Payable for P4,850 and a credit to
Cash for P4,850
Accounts Payable for P5,000 and a credit to
Cash for P5,000
Accounts Payable for P4,850 and to
Interest Expense for P150 and a credit to
Cash for P5,000
Accounts Payable for P4,850 and to
Interest Revenue for P150 and a credit to
Cash for P5,000
Chapter 10 Solutions
Intermediate Accounting (2nd Edition)
Ch. 10 - How is inventory tracked under a perpetual...Ch. 10 - Barbara Wight is Chief Financial Officer at Taylor...Ch. 10 - What costs should be included in the unit cost of...Ch. 10 - When does the inventory allocation problem arise?Ch. 10 - Explain the difference between the FIFO method of...Ch. 10 - Which method of inventory results in an inventory...Ch. 10 - If unit costs are rising and inventory levels are...Ch. 10 - How can financial statements be converted from the...Ch. 10 - Explain the unit of measure under the dollar-value...Ch. 10 - What do firms use as the market value when...
Ch. 10 - Do U.S. GAAP and IFRS treat inventory write-downs...Ch. 10 - Under IFRS, how do firms determine...Ch. 10 - How does the conventional retail method...Ch. 10 - Why would a company use the gross profit method to...Ch. 10 - How are required LIFO disclosures used to compute...Ch. 10 - How does a company build LIFO layers under the...Ch. 10 - Giddens Company adopted the dollar-value UFO...Ch. 10 - The Loyd Company lad 150 units of product Omega on...Ch. 10 - Simmons, Inc. uses the lower-of-cost-or-market...Ch. 10 - Simmons, Inc. uses the lower-of-cost-or-market...Ch. 10 - The Loyd Company had 150 units of product Omega on...Ch. 10 - The Loyd Company had 150 units of product Omega on...Ch. 10 - On March 1, Year 1, LuxWear me had beginning...Ch. 10 - Types of Manufacturing Inventory. Complete the...Ch. 10 - Periodic Inventory System. Emmy Company uses a...Ch. 10 - Prob. 10.3BECh. 10 - Prob. 10.4BECh. 10 - FIFO, Perpetual Basis. Spider incorporated...Ch. 10 - LIFO, Perpetual Basis. Using the information...Ch. 10 - Prob. 10.7BECh. 10 - LIFO Reserve. Best Stores is considering a change...Ch. 10 - LIFO. Perpetual Basis. Source Enterprises reports...Ch. 10 - LIFO Liquidation. Using the information provided...Ch. 10 - Prob. 10.11BECh. 10 - Dollar-Value LIFO, Conversion to FIFO. Using the...Ch. 10 - Lower of Cost or Market. Count Clothing Company...Ch. 10 - Lower of Cost or Market. Using the information in...Ch. 10 - Lower of Cost or Market, IFRS. Using the...Ch. 10 - Prob. 10.16BECh. 10 - Prob. 10.17BECh. 10 - Lower of Cost or Market. Sarat Boot Company...Ch. 10 - Prob. 10.19BECh. 10 - Prob. 10.20BECh. 10 - Prob. 10.21BECh. 10 - Gross Profit Method. Sammi Company needs to...Ch. 10 - Prob. 10.23BECh. 10 - LIFO Retail Inventory Method. Complete the...Ch. 10 - LIFO Retail Inventory Method. Complete the...Ch. 10 - Moving Average, FIFO, LIFO. Arthur Lloyd...Ch. 10 - Moving Average, FIFO, LIFO, Presentation, and...Ch. 10 - Moving Average, FIFO, LIFO. Zoola, Inc. provided...Ch. 10 - Prob. 10.4ECh. 10 - LIFO, Conversion to FIFO. Inventory transactions...Ch. 10 - LIFO. Burke Company uses the LIFO perpetual method...Ch. 10 - Prob. 10.7ECh. 10 - Dollar-Value LIFO, LIFO Reserve. CWB Teleconcepts,...Ch. 10 - Dollar-Value LIFO, No Liquidation. Joe the Grocer...Ch. 10 - Prob. 10.10ECh. 10 - Lower of Cost or Market. All-Kinds-of-Cases...Ch. 10 - Prob. 10.12ECh. 10 - Lower of Cost or Market. Printmaster Distributors...Ch. 10 - Prob. 10.14ECh. 10 - Prob. 10.15ECh. 10 - Conventional Retail Inventory Method. Melvin...Ch. 10 - Gross Profit Method. A tsunami destroyed Kyoto...Ch. 10 - Prob. 10.18ECh. 10 - Prob. 10.19ECh. 10 - Prob. 10.20ECh. 10 - Dollar-Value LIFO Retail Inventory Method....Ch. 10 - Moving Average, FIFO, LIFO. Morocco Imports...Ch. 10 - Prob. 10.2PCh. 10 - LIFO, Conversion to FIFO. The Outsider Company,...Ch. 10 - Dollar-Value LIFO. The Happenings Company adopted...Ch. 10 - Dollar-Value LIFO. No Liquidation. Nat's Toy...Ch. 10 - Dollar-Value LIFO, LIFO Liquidation. The following...Ch. 10 - Dollar-Value LIFO. LIFO Liquidation. Silvio's...Ch. 10 - Lower of Cost or Market. Framingdale Factories....Ch. 10 - Lower of Cost or Market. O'Sullivan Corporation...Ch. 10 - Conventional Retail Inventory Method. John Stevens...Ch. 10 - Prob. 10.11PCh. 10 - Prob. 10.12PCh. 10 - Basic Retail Inventory Method and Conventional...Ch. 10 - Basic Retail Inventory Method and Conventional...Ch. 10 - Prob. 10.15PCh. 10 - Conventional Retail Inventory Method, Lower of...Ch. 10 - Prob. 1JCCh. 10 - Judgment Case 2: Inventory Costing BBS is a...Ch. 10 - Judgment Case 3: Lower of Cost or Market KR...Ch. 10 - Prob. 1FSCCh. 10 - Prob. 2FSCCh. 10 - Prob. 1SSCCh. 10 - Prob. 2SSCCh. 10 - Surfing the Standards Case 3: Time Shares Treasure...Ch. 10 - Surfing the Standards Case 4: Lower of Cost or...Ch. 10 - Prob. 1BCCCh. 10 - Basis for Conclusions Case 2: The Lower of Cost or...
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Similar questions
- If a retailer purchased inventory in the amount of $750, terms 2/10, n/60, returned $30 of the inventory for a full refund, and received an allowance for $95, how much would the discount be if the retailer remitted payment within the discount window?arrow_forwardIf a customer purchased merchandise in the amount of $340, terms 3/10, n/30, returned $70 of the inventory for a full refund, and received an allowance for $65, how much discount would be applied if the customer remitted payment within the discount window?arrow_forwardPrepare journal entries for the following sales and cash receipts transactions. (a) Merchandise is sold on account for 300 plus 3% sales tax, with 2/10, n/30 cash discount terms. (b) Part of the merchandise sold in transaction (a) for 70 plus sales tax is returned for credit. (c) The balance on account for the merchandise sold in transaction (a) is paid in cash within the discount period.arrow_forward
- A customer returns $690 worth of merchandise and receives a full refund. What accounts recognize this sales return, assuming the customer has not yet remitted payment to the retailer? A. accounts receivable, sales returns and allowances B. accounts receivable, cash C. sales returns and allowances, purchases D. sales discounts, cost of goods soldarrow_forwardUnder the periodic inventory system, what account is credited when an estimate is made for sales made this year, but expected to be returned next year? (a) Merchandise Inventory (b) Customer Refunds Payable (c) Sales (d) Sales Returns and Allowancesarrow_forwardIf a retailer made a purchase in the amount of $350 with credit terms of 2/15, n/60. What would the retailer pay in cash if they received the discount?arrow_forward
- Under the periodic inventory system, what account is debited when an estimate is made for sales made this year, but expected to be returned next year? (a) Sales Returns and Allowances (b) Merchandise Inventory (c) Customer Refunds Payable (d) Salesarrow_forwardA retailer returns $400 worth of inventory to a manufacturer and receives a full refund. What accounts recognize this return before the retailer remits payment to the manufacturer? A. accounts payable, merchandise inventory B. accounts payable, cash C. cash, merchandise inventory D. merchandise inventory, cost of goods soldarrow_forwardA retailer pays on credit for $650 worth of inventory, terms 3/10, n/40. If the merchandiser pays within the discount window, how much will the retailer remit in cash to the manufacturer? A. $19.50 B. $630.50 C. $650 D. $195arrow_forward
- Jessie Stores uses the periodic system of calculating inventory. The following information is available for December of the current year when Jessie sold 500 units of inventory. Using the FIFO method, calculate Jessies inventory on December 31 and its cost of goods sold for December. RE7-11 Using the information from RE7-10, calculate Jessie Storess inventory on December 31 and its cost of goods sold for December using the LIFO method.arrow_forwardA customer pays on credit for $1,250 worth of merchandise, terms 4/15, n/30. If the customer pays within the discount window, how much will they remit in cash to the retailer? Assume the perpetual inventory system is used.arrow_forwardThe Stationery Company purchased merchandise on account from a supplier for $9,300, terms 1/10, n/30. The Stationery Company returned $1,200 of the merchandise and received full credit. a. If Stationery Company pays the invoice within the discount period, what is the amount of cash required for the payment? b. Under a perpetual inventory system, what account is credited by Stationery Company to record the return? Cost of Merchandise Sold ? Inventory ? Sales ? Accounts Payable?arrow_forward
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