Question

On March 26, Ranger Company placed an order to purchase inventory on account from Park Company The inventory had a list price of $80,000 in Parks sales catalog and was carried on Parks Balance Sheet at a historical cost of $50,000. Ranger is a regular customer and was able to negotiate a 15% trade discount as well as payment t March 30 with $2,000 of freight pre-paid The goods arrived at Rangers facility on April 2. On April 3 erms bf 2/10, n/30. The inventory was shipped FOB point on Ranger returned S5,000 of merchandise (the returned items had an original cost to Park of $3,125) and on April 5th Ranger paid the full balance owed to Park Company On what date should Ranger prepare the initial entry to record the purchased goods (i.e. entry 0) from lecture)? A. March 26 B. March 30 C. April 2 D. April 3 E. April 5 8. Consider the facts for Ranger and Park Company. Which of the below entries would be made by Park to record the shipping (ie, entry #2 from lecture)? For S200。butr璣 (A. Accounts Receivable S2,000 Cash B. Accounts Payable $2,000 Cash $2,000 C. Transportation Out $2,000 Cash $2,000 D. Merchandise Inventory $2,000 S2,000 Cash E. No entry would be necessary. How much cash will Ranger pay Park in order to settle 9. Continue with the facts for Ranger and Park. the Accounts Payable in full? A. $75,000 B. $63,740 C. S65,000 D. $61,740 E. None of the above 0-900
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Answer #1

ANSWER:-

(C) April 2

In FOB Shipping Point Risk and Rewards regarding goods is transfer to buyer when goods are arrived. since the goods are arrived on april 2. so the entry for inital purchase was passed on april 2.

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