Question

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Prepare the journal entries to record the following transactions on Ayayai Company's books using a perpetual inventory system Your answer is correct. On March 2, Blossom Company sold £801,000 of merchandise on account to Ayayal Company, terms 2/10,n/30. The cost of the merchandise sold was £521,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry"for the account titles and enter for the amounts.) Debit Credit Account Titles and Explanation Inventory 801000 Accounts Payable 801000 Your answer is correct. On March 6, Ayayai returned £105,000 of the merchandise purchased on March 2. The cost of the returned merchandise was £75,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Debit Credit Account Titles and Explanation Accounts Payable 105000 Inventory 105000 - Your answer is partially correct. On March 12, Blossom received the balance due from Ayayai. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) Debit Credit Account Titles and Explanation Accounts Payable 696000 Inventory 295500 Cash 400500

Answer 1

Final amount due = Cost of goods purchased - Cost of goods returned
= 801,000 – 105,000
= $696,000
Discount amount = Final amount due x Discount percentage
= 696,000 x 2/100
= $13,920
Cash payment to be made = Final amount due - Discount amount
= 696,000 – 13,920
= $682,080

Date	Account Titles and Explanation	Debit	Credit
March 12	Accounts payable	$696,000
	Inventory		$13,920
	Cash		$682,080

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