Question

Kleso, Intermediate Accounting. 160 Help System Announcements CALCULATOR PRINTER VERSION BACK NEXT Exercise 3-8 Flounder Industries purchased $9,300 of merchandise on February 1, 2017, subject to a trade discount of 10% and with credit terms of 3/15, /60. It returned $2,700 (gross price before trade or cash discount) on February 4. The invoice was paid on February 13. Assuming that Hounder uses the perpetual method for recording merchandise transactions, record the purchase, return, and payment using the gross method. I no entry is required, select "No entry for the account titles and enter for the amounts. Round answers to decimal places, g. 6,578 Credit account titles are automatically indented when amount is entered. Do not indent manually.) Debit Credit o Assuming that Flounder uses the periodic method for recording merchandise transactions, record the purchase retum, and payment using the gross method f entry for the account titles and enter for the amounts. Round answers to decimal places... 57. Credit account bites are automatically Do not indent manually.) r select No when amount is entered Account Tities and Explanation Debit Credit

Answer 1

Solution : journal entries under Perpectual method

Date . Account. Debit. Credit

Feb 1. Merchandise inventory. $ 9,300

Accounts payable. $ 9,300

( To record purchase of merchandise

On credit )

Feb 4. Accounts payable. $ 2,700

Merchandise inventory. $ 2,700

( To record Return Of

merchandise on credit)

Feb 13. Accounts payable. $ 6,600

($ 9,300 - $ 2,700)

Merchandise inventory $ 198

($ 6,600 X 3%)

Cash. ( $ 6,600 - 198) $ 6,402

( To record payment of merchandise

Less discount and return)

Journal entries under Periodic method

Date . Accounts . Debit. Credit

Feb 1. Purchases. $ 9,300

Accounts payable. $ 9,300

( To record purchase of merchandise

on credit)

Feb 4. Accounts payable. $ 2,700

Purchase returns. $ 2,700

( To record return of merchandise

for  credit )

Feb 13. Accounts payable. $ 6,600

($ 9,300 - $ 2,700)

Purchase discount. $ 198

( $ 6,600 X 3%)

Cash. ($ 6,600 - 198) $ 6,402

( To record payment for merchandise

Less discount and return)