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Accounting
Purchase price: $4.20 Selling price: $5.70 Purchase discount (paid in 10 days): 6% Sales discount (received in 15 days): 10%

Purchase price: $4.20 Selling price: $5.70 Purchase discount (paid in 10 days): 6% Sales discount (received in 15 days): 10%

FINANCIAL ACCOUNTING
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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The XZ Ltd. is a retailer and uses the Perpetual Inventory System. The below information is available regarding the purchases and sales activities:

  • Purchase price: $4.20
  • Selling price: $5.70
  • Purchase discount (paid in 10 days): 6%
  • Sales discount (received in 15 days): 10%

Calculate the correct entries for its business activities.

  1. The XZ purchased 300 units on credit from AA on the 2nd of July.
  2. The XZ sold 200 units on credit to DSX on the 3rd of July.
  3. The XZ returned 50 defective units to AA on the 9th of July.
  4. The XZ paid cash to AA on the 11th of July.
  5. DSX paid its purchase on the 12th of July.
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