1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
iogann1982 [59]
3 years ago
7

Journalize the following transactions for the buyer, Morgan Company, using the net method to account for purchase discounts. Ass

ume a perpetual inventory system. January 3 Purchased goods from Grieg Company on account, $15,000, terms 5/10, n/30. January 9 Returned defective merchandise to Grieg Company that was previously purchased on account, $2,100. January 13 Paid the amount due to Grieg Company.
Business
1 answer:
Vikentia [17]3 years ago
5 0

Answer:

Morgan Company

Journal Entries:

January 3:

Debit Inventory $15,000

Credit Purchase Discount $750

Credit Accounts Payable (Grieg Company) $14,250

To record the purchase of goods on account, terms 5/10, n/30.

January 9:

Debit Accounts Payable (Grieg Company) $1,995

Debit Purchase Discount (Lost) $105

Credit Inventory $2,100

To record the return of defective merchandise.

January 13:

Debit Accounts Payable (Grieg Company) $12,255

Credit Cash Account $12,255

To record the payment of amount due.

Explanation:

Using the perpetual inventory system, the purchase and return of merchandise are recorded in the Inventory account and not in the Purchases account (periodic inventory system).  The cost of goods sold is also credited to the Inventory account.  The perpetual inventory system operates on the use of technology which is able to record inventory transactions as they occur, instead of waiting till the end of a period.  This means that perpetual inventory is being taken every time a transaction occurs.

Using the net method to account for purchased cash discount, it is assumed that the retailer always takes advantage of the discounted cash price and records the purchased inventory at the discounted price. The net method is a way to record purchases of inventory with a cash discount.

Under the net method, the company will credit Accounts Payable for the invoice amount minus any early payment discount that is offered.  Under the gross method, purchases are recorded at the full invoice price without deduction of any cash discounts.

You might be interested in
You are a recent college graduate who has just landed your first job. The company that hired you has
Alex73 [517]
Well 50% of 50,000 is 25,000 so I’d say make sure your cars don’t go above 15,000 a Year cause Car(s)
5 0
3 years ago
Explain the importance of benefits on employee retention
victus00 [196]
Employees that enjoy what they do and the atmosphere in which they work are more likely to remain employed with their company. Retention strategies are important because they help create a positive work environment and strengthen an employee's commitment to the organization. By giving employees more perks, more money, and more benefits, you will increase morale.
6 0
3 years ago
Which of the following fraudulent activities most likely could be perpetrated due to the lack of effective internal controls in
Alex17521 [72]

Answer:

C. The write-off of receivables by personnel who receive cash permits the misappropriation of cash.

8 0
3 years ago
The law of diminishing returns indicates that:a. because of economies and diseconomies of scale a competitive firm's long-run av
Olegator [25]

Answer:

The correct answer is option c.

Explanation:

The law of diminishing returns states that as we go on employing additional inputs the return or payoff from each unit of input will become smaller or go on declining. This means that after a certain point the total output will start increasing on a decreasing rate as we go on hiring more inputs.

In other words, the marginal product of inputs will go on declining with each additional unit of input employed. As a result after reaching a certain point, the marginal product starts to decline.

7 0
3 years ago
We define differentiation as: Group of answer choices Dividing a market into different age and life-cycle groups. Tailoring prod
Gre4nikov [31]

Answer:

Option C Differentiating the market offering to create superior customer value

Explanation:

The reason is that when the product are differentiated from the rest of the products in the market, it creates a sense of superiority among products because of its quality, uniqueness and exceptional things that the company offer with the product. Due to differentiated strategy, the company is able to sell at a higher price which earns greater profit for the company.

3 0
3 years ago
Read 2 more answers
Other questions:
  • Your firm will issue 10-year bonds to raise $10 million. You will either (a) issue regular coupon bonds which have a 6% coupon r
    14·1 answer
  • In an enterprise-class database system, reports are created by ________.
    13·1 answer
  • If a pension plan has not established an irrevocable trust to account for defined benefit pension plan contributions and distrib
    11·2 answers
  • Consider the production of paper in Strelsau. Suppose that the supply of paper is upward-sloping and the demand for paper is dow
    12·1 answer
  • In 1972, one could buy a bag of chips, a pound of hamburger, a package of buns, and a small bag of charcoal for about $2.50. If
    7·1 answer
  • Dominic is looking over his spending pattern for the past week to try to determine how much money he had on Sunday. This is Domi
    11·1 answer
  • Everdeen Inc. has a 90-day operating cycle. If its average age of inventory is 35 days, how long is its average collection perio
    9·1 answer
  • Audience quality, audience engagement, and editorial quality are most likely to be considered when a media planner ________.
    15·1 answer
  • Garden Zurich Corp. manufactures garden fountains. It currently has two product lines, the basic and the luxury. Garden Zurich h
    8·1 answer
  • Remodeling is an<br> A. neither. B. Asset. C.expense
    9·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!