Question

Santa Fe Corporation uses the perpetual inventory method. On March 1, it purchased $60,000 of merchandise inventory, terms 2/10, n/30. On March 3, Santa Fe returned goods (not damaged) that cost $6,000. On March 9, Santa Fe paid the supplier. On March 9, Santa Fe should credit:

Answer 1

Answer and Explanation:

The Journal entry is shown below:-

Accounts payable Dr, $54,000 ($60,000 - $6,000)

           To Inventory , $1,080  ($54,000 × 2%)

           To Cash $52,920

(Being cash paid for accounts payable is recorded)

Here we debited the inventory as it increased the current assets and we credited the cash and account payable as it decreased the current assets and increased the current liabilities.