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Santa Fe Retailing purchased merchandise "as Is" (with no returns) from Mesa Wholesalers with credit terms of 210, n/60 and an Invoice price of $20.700. The merchandise had cost Mesa $14,17. Assume that both buyer and seller use a perpetual Inventory system and the gross method. 1. Prepare entries that the buyerrecords for the (a) purchase, (b) cash payment within the discount perlod, and (C) cash payment after the discount perlod. 2 Prepare entries that the sellerrecords for the (a) sale. (b) cash collection within the discount perlod, and (c) cash collection afterthe discount perlod. Complete this question by entering your answers in the tabs below.

Santa Fe Retailing purchased merchandise "as Is" (with no returns) from Mesa Wholesalers with credit terms of 210, n/60 and an Invoice price of $20.700. The merchandise had cost Mesa $14,17. Assume that both buyer and seller use a perpetual Inventory system and the gross method. 1. Prepare entries that the buyerrecords for the (a) purchase, (b) cash payment within the discount perlod, and (C) cash payment after the discount perlod. 2 Prepare entries that the sellerrecords for the (a) sale. (b) cash collection within the discount perlod, and (c) cash collection afterthe discount perlod. Complete this question by entering your answers in the tabs below.

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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**Educational Content on Journal Entries for Inventory Purchases** **Scenario Overview:** Santa Fe Retailing purchased merchandise "as is" (no returns) from Mesa Wholesalers with credit terms of 2/10, n/60, and an invoice price of $20,700. The merchandise cost Mesa $14,117. Both the buyer and seller use a perpetual inventory system and the gross method. **Tasks:** 1. Prepare entries for the buyer for: - (a) Purchase - (b) Cash payment within the discount period - (c) Cash payment after the discount period 2. Prepare entries for the seller for: - (a) Sale - (b) Cash collection within the discount period - (c) Cash collection after the discount period **Instructions:** Complete the answers in the tabs provided. --- **Journal Entry Worksheet:** **Transaction Details:** - **Transaction a** - **Record:** - Santa Fe Retailing purchased merchandise "as is" (no returns) from Mesa Wholesalers with credit terms of 2/10, n/60 and an invoice price of $20,700. **Journal Entry Table:** - **General Journal** | Transaction | Description | Debit | Credit | |-------------|---------------------|--------|--------| | a | | | | - Enter debits before credits. **Buttons:** - **Record Entry:** To submit the journal entry. - **Clear Entry:** To clear the current inputs. - **View General Journal:** To view all recorded transactions. **Navigation:** - Navigate between requirements using the "Required 1" and "Required 2" buttons. --- This educational content guides users through the process of recording journal entries for purchases and payments, emphasizing understanding of credit terms and inventory systems.
Transcribed Image Text:**Educational Content on Journal Entries for Inventory Purchases** **Scenario Overview:** Santa Fe Retailing purchased merchandise "as is" (no returns) from Mesa Wholesalers with credit terms of 2/10, n/60, and an invoice price of $20,700. The merchandise cost Mesa $14,117. Both the buyer and seller use a perpetual inventory system and the gross method. **Tasks:** 1. Prepare entries for the buyer for: - (a) Purchase - (b) Cash payment within the discount period - (c) Cash payment after the discount period 2. Prepare entries for the seller for: - (a) Sale - (b) Cash collection within the discount period - (c) Cash collection after the discount period **Instructions:** Complete the answers in the tabs provided. --- **Journal Entry Worksheet:** **Transaction Details:** - **Transaction a** - **Record:** - Santa Fe Retailing purchased merchandise "as is" (no returns) from Mesa Wholesalers with credit terms of 2/10, n/60 and an invoice price of $20,700. **Journal Entry Table:** - **General Journal** | Transaction | Description | Debit | Credit | |-------------|---------------------|--------|--------| | a | | | | - Enter debits before credits. **Buttons:** - **Record Entry:** To submit the journal entry. - **Clear Entry:** To clear the current inputs. - **View General Journal:** To view all recorded transactions. **Navigation:** - Navigate between requirements using the "Required 1" and "Required 2" buttons. --- This educational content guides users through the process of recording journal entries for purchases and payments, emphasizing understanding of credit terms and inventory systems.
**Required Information** *(The following information applies to the questions displayed below.)* Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller) products. **Transactions:** - **May 3**: Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $12 cash per unit (for a total cost of $24,000). - **May 5**: Allied sold 1,000 of the units in inventory for $16 per unit (invoice total: $16,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $12,000. - **May 7**: Macy returns 180 units because they did not fit the customer’s needs (invoice amount: $1,600). Allied restores the units, which cost $1,200, to its inventory. - **May 8**: Macy discovers that 100 units are scuffed but are still of use and, therefore, keeps the units. Allied gives a price reduction (allowance) and credits Macy’s accounts receivable for $800 to compensate for the damage. - **May 15**: Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount. **Instructions:** Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross method. **Journal Entry Worksheet:** 1. Date: May 3 - Transaction: Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $12 cash per unit (for a total cost of $24,000). - General Journal: - Debit: Inventory - Credit: Cash **Note:** Enter debits before credits. **Buttons:** - Record entry - Clear entry - View general journal This text provides a detailed explanation of Allied Merchandisers’ transactions and instructions for recording these transactions using a journal entry worksheet. The worksheet includes columns for the date, general journal, debit, and credit information. These entries use a perpetual inventory system and the gross method, which is typical in accounting for recording inventory purchases.
Transcribed Image Text:**Required Information** *(The following information applies to the questions displayed below.)* Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller) products. **Transactions:** - **May 3**: Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $12 cash per unit (for a total cost of $24,000). - **May 5**: Allied sold 1,000 of the units in inventory for $16 per unit (invoice total: $16,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $12,000. - **May 7**: Macy returns 180 units because they did not fit the customer’s needs (invoice amount: $1,600). Allied restores the units, which cost $1,200, to its inventory. - **May 8**: Macy discovers that 100 units are scuffed but are still of use and, therefore, keeps the units. Allied gives a price reduction (allowance) and credits Macy’s accounts receivable for $800 to compensate for the damage. - **May 15**: Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount. **Instructions:** Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross method. **Journal Entry Worksheet:** 1. Date: May 3 - Transaction: Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $12 cash per unit (for a total cost of $24,000). - General Journal: - Debit: Inventory - Credit: Cash **Note:** Enter debits before credits. **Buttons:** - Record entry - Clear entry - View general journal This text provides a detailed explanation of Allied Merchandisers’ transactions and instructions for recording these transactions using a journal entry worksheet. The worksheet includes columns for the date, general journal, debit, and credit information. These entries use a perpetual inventory system and the gross method, which is typical in accounting for recording inventory purchases.
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