FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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You are considering purchasing 850 units of inventory.
Requirements:
1. Determine which supplier offers the lowest net cost.
Price
Terms
Freight (total)
Descriptions
Analysis
Company A
$42.00
1/10
n/30
Company A
Company B
$40.00
2/10
n/30
$200.00
Company B
2. Which company provided the best deal (A or B)?
3. What was the total price for all units from tha
4. Using the company which yielded the better price
a. Journalize the purchase price (for any freight debit Merchandise Inventory and credit cash in a separate entry)
b. Payment within the discount period (be sure to take any discount)
c. a cash refund of 12 defective units (remember you took a discount on the purchase price)
Journal Entries
Account
Debit
Credit
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Transcribed Image Text:You are considering purchasing 850 units of inventory. Requirements: 1. Determine which supplier offers the lowest net cost. Price Terms Freight (total) Descriptions Analysis Company A $42.00 1/10 n/30 Company A Company B $40.00 2/10 n/30 $200.00 Company B 2. Which company provided the best deal (A or B)? 3. What was the total price for all units from tha 4. Using the company which yielded the better price a. Journalize the purchase price (for any freight debit Merchandise Inventory and credit cash in a separate entry) b. Payment within the discount period (be sure to take any discount) c. a cash refund of 12 defective units (remember you took a discount on the purchase price) Journal Entries Account Debit Credit
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