Alison's dress shop buys dresses from McGuire Manufacturing. Alison purchased dresses from McGuire on July 17 and received an invoice with a list price amount of $5,100 and payment terms of 2/10, n/30. Alison uses the net method to record purchases. Alison should record the purchase at: Multiple Choice O $2,499. $5,100. $5,202. $4,998.

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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TB MC Qu. 8-53 (Algo) Alison's dress shop buys dresses from...
Alison's dress shop buys dresses from McGuire Manufacturing. Alison purchased dresses from McGuire on July 17 and received an invoice with a
list price amount of $5,100 and payment terms of 2/10, n/30. Alison uses the net method to record purchases. Alison should record the purchase at:
Multiple Choice
O
O
$2,499.
$5,100.
$5,202.
$4,998.
Transcribed Image Text:TB MC Qu. 8-53 (Algo) Alison's dress shop buys dresses from... Alison's dress shop buys dresses from McGuire Manufacturing. Alison purchased dresses from McGuire on July 17 and received an invoice with a list price amount of $5,100 and payment terms of 2/10, n/30. Alison uses the net method to record purchases. Alison should record the purchase at: Multiple Choice O O $2,499. $5,100. $5,202. $4,998.
Expert Solution
Step 1
Under the net method of purchases, purchases are recorded at net of discount.    
Term 2/10 indicates 2% discount if invoice is paid within 10 days.    
Under the net method of purchases, purchase by Alison's dress shop would be recorded at 2% discount.
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