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Liono4ka [1.6K]
3 years ago
11

Gummy Co. purchased merchandise on June 10 at a $9,000 invoice price with terms of 2/10,n/30 and paid for the merchandise on Jun

e 30. Illustrate the required entries to record and pay for this purchase under the gross method and net methods by matching the action on the left with the method on the right. (Assume a periodic inventory system is used.)
Business
1 answer:
Olenka [21]3 years ago
6 0

Answer:

June 10

Debit Purchases for $9,000: Gross method

June 30

Debit Discounts lost for $180: Net method

June 30

Credit Cash for $9,000 : Both methods

Explanation:

To Illustrate the required journal entries to record and pay for this purchase under the GROSS METHOD and NET METHODS by matching the action on the left with the method on the right using a PERIODIC INVENTORY SYSTEM.

June 10

Debit Purchases for $9,000: Gross method

June 30

Debit Discounts lost for $180: Net method

(2%*$9,000)

June 30

Credit Cash for $9,000 : Both methods

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Answer:

b. Barb is correct. The agreement must be in writing to be enforceable.

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For a contract between two parties to be enforceable, it will need to be verifiable. A phone conversation that involves verbal agreement can be denied by either party. So it is most preferable when contracts are on written form.

In this instance Andy had the following conversation and there was conflict in the agreement between the parties.

Andy: "This is to confirm our telephone conversation of earlier today. 200 lbs. of T-bone at $2.89 per pound." Barb: "Yes, but that's 100 pounds at $2.99." Andy: "Too late, we already reached agreement by phone." Barb: "Too bad, it wasn't in writing."

Of the agreement had been in writing then it would have been enforceable on Barb.

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3 years ago
If Roten Rooters, Inc., has an equity multiplier of 1.63, total asset turnover of 2.50, and a profit margin of 4.3 percent, what
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Answer: 17.52%

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