A company that uses the perpetual inventory system purchased inventory for $1,130,000 on account with terms of 5/7, n/20. Which of the following correctly records the payment made 15 days after the date of invoice? A. Accounts Payable 1,130,000 Merchandise Inventory 1,130,000 B. Accounts Payable 1,130,000 Merchandise Inventory 56,500 Cash 1,073,500 C. Accounts Payable 1,130,000 Cash 1,130,000 D. Cash 1,130,000 Accounts Payable 1,130,000

A company that uses the perpetual inventory system purchased inventory for $1,130,000 on account with terms of 5/7, n/20. Which of the following correctly records the payment made 15 days after the date of invoice? A. Accounts Payable 1,130,000 Merchandise Inventory 1,130,000 B. Accounts Payable 1,130,000 Merchandise Inventory 56,500 Cash 1,073,500 C. Accounts Payable 1,130,000 Cash 1,130,000 D. Cash 1,130,000 Accounts Payable 1,130,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Gg.24.
XYZ Company purchased inventory worth $10,000 on credit with terms of 2/10, net 30. The company pays the invoice within the discount period. Calculate the amount paid and the cost of inventory if the company takes the discount.
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