Question

Santa Fe Sailing purchased merchandise "as is" (with no returns) from Mesa Wholesalers with credit terms of 2010. n 60 and an i re of $16.400 The merchandise had cost Mesa $11,185. Assume that both buyer and seller use a perpetual invertory system and the gross method. 1. Prepare entries that the buyerrecords for the (a) purchase. (b) cash payment within the discount period, and (c) cash payment after the discount period. 2. Prepare entries that the seller records for the (a) sale. (b) cash collection within the discount period, and (c) cash collection after the discount period. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare entries that the buyer records for the (a) purchase, (b) cash payment within the discount period, and (c) cash payment after the discount period. View transaction list Journal entry worksheet Record Santa Fe Retailing purchased merchandise "as is" (with no returns) from Mesa Wholesalers with credit terms of 2/10, n/60 and an invoice price of $16,400. Note: Enter debits before credits Transaction General Journal Debit Credit

Answer 1

Debit Debit 16,400 No. Account Title and Explanation (a) Merchandise inventory Accounts payable (merchandise purchased on account) 16,400 16,400 (b) Accounts payable Merchandise inventory Cash (cash paid to supplier within discount period) 328|(16,400*2%) 16,072 16.400 (c) Accounts payable Cash (cash paid to supplier after discount period) 16,400

Debit Debit 16,400 2) No. Account Title and Explanation (a) Accounts receivable Sales (Merchandise sold on account) 16,400 11,185 Cost of goods sold Merchandise inventory (Cost of goods sold recorded) 11,185 (b) Cash 16,072 Sales Discount 328 Accounts Receivables (Cash received from customer within discount period) 16,400 (c) Cash 16,400 Accounts Receivables Cash received from customer after discount period) 16,400