Question

Exercise 4-lUA <:.ash lliscoums a11a pm·cnllse re111ru:; :)n March 6, 20 I I , Bob·s Imports purchased merchand ise from Watches I nc. with a list price of 33 I.000. term s 2/ I0. n/ 45. On March I 0. Bo b's returned merchandi se to Watches ln c. for credit. The list price of the ret urned me rchand ise was $6,400. Bob·s paid cash to settle the accounts pay­ :1.ble on March 15. 2011. Required a. What is the amount of the check that Bob 's must write to Watc hes Jnc. on March 15 ? b. Record the events in a hor izontal stateme nts model like the follow ing one.

Answer 1

Purchases Less Merchandise returned Net purchases Less Discount (24600*2%) Net amount due 31000 -6400 24600 -492 24108 14 b. Record the events in a horizontal statements model like the follow ing one. 15 16 Assets + Equity Revenues - Expenses = Net Income Cash Flows = 18 Cash 6-Mar 10-Mar 15-Mar Inventory 31000 -6400 Liabilities Accounts Payable 31000 -6400 -24600 -24108 492 -24108 OA