Edwards Co. purchased raw materials with a cost of $95,000 on March 2, 2015. Credit terms...
Edwards Co. purchased raw materials with a cost of $95,000 on
March 2, 2015. Credit terms of 3/20, n/60 applied.
Refer to Exhibit 7-2. If Edwards uses the net method and pays for
the purchase on March 31, 2015, what amount is recorded in the
Purchase Discounts Lost account?
$4,000
$0
$2,850
$8,000
Homework Answers
Purchase cost = $95,000
Discount terms 3% if paid in 20 days.
But Edwards co. paid on March 31st beyond discount terms. So, no discount will be provided.
Discounts lost = $95,000*3% = $2,850
Option 'C' is correct
$2,850
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Edwards Co. purchased raw materials with a cost of $95,000 on
March 2, 2015. Credit terms...
Edwards Co. purchased raw materials with a cost of $95,000 on March 2, 2015. Credit terms...
Edwards Co. purchased raw materials with a cost of $95,000 on March 2, 2015. Credit terms of 3/20, n/60 applied. Refer to Exhibit 7-2. If Edwards uses the net method and pays for the purchase on March 18, 2015, what amount is recorded in the Purchase Discounts Taken account? $3,000 $2,850 $0 $5,000
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