On January 4, 2019, Dunbar Company purchased, on credit, 2,000 television sets at $700 each. Terms of the purchase were 2/10, n/30. Dunbar paid for 20% of these sets on January 13 and the remaining 80% on February 1.Required:1.Prepare the journal entries on Dunbar Company’s books, assuming that it uses the net price method to record its merchandise. (Dunbar uses a perpetual inventory system.) 2.Next Level Discuss the conceptual advantage of the net price method compared to the gross price method.

Terms 2/10,n/30 means 2% discount will be provided if payment is made with in 10 days of…

Answered: January 4, 2019, Dunbar Company…

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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On January 4, 2019, Dunbar Company purchased, on credit, 2,000 television sets at $700 each. Terms of the purchase were 2/10, n/30. Dunbar paid for 20% of these sets on January 13 and the remaining 80% on February 1.

Required:

1.	Prepare the journal entries on Dunbar Company’s books, assuming that it uses the net price method to record its merchandise. (Dunbar uses a perpetual inventory system.)
2.	Next Level Discuss the conceptual advantage of the net price method compared to the gross price method.

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