5. Never Corp. purchased merchandise during 2014 on credit for P200,000; terms 2/10, n/30. All of the gross liability except P40,000 was paid within the discount period. The remainder was paid within the 3-day term. At the end of the annual accounting period, December 31, 2014, 90% of merchandise had been sold and 10% remained in inventory. The company uses a periodic system. Required: Assuming the net method is used for recording purchases, prepare the entries for the purchase and two subsequent payments.

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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5. Never Corp. purchased merchandise during 2014 on credit for P200,000;
terms 2/10, n/30. All of the gross liability except P40,000 was paid within the
discount period. The remainder was paid within the 3-day term. At the end
of the annual accounting period, December 31, 2014, 90% of merchandise
had been sold and 10% remained in inventory. The company uses a periodic
system.
Required: Assuming the net method is used for recording purchases,
prepare the entries for the purchase and two subsequent payments.
Transcribed Image Text:5. Never Corp. purchased merchandise during 2014 on credit for P200,000; terms 2/10, n/30. All of the gross liability except P40,000 was paid within the discount period. The remainder was paid within the 3-day term. At the end of the annual accounting period, December 31, 2014, 90% of merchandise had been sold and 10% remained in inventory. The company uses a periodic system. Required: Assuming the net method is used for recording purchases, prepare the entries for the purchase and two subsequent payments.
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