Some of the transactions of Duder Company during March are listed below. Duder uses the periodic inventory method. March 8 Purchased merchandise on account, $15,000, terms 1/10, n/30. 11 Returned part of the purchase of March 8, $2,200, and received credit on account. 17 Purchased merchandise on account, $16,000, terms 2/10, n/30. 26 Paid invoice of March 17 in full. 27 Purchased merchandise on account, $36,000, terms 2/10, n/60. Instructions (a) Assuming that purchases are recorded at gross amounts and that discounts are to be recorded when taken: (1) Prepare general journal entries to record the transactions. (2) Describe how the various items would be shown in the financial statements. (b) Assuming that purchases are recorded at net amounts and that discounts lost are treated as financial expenses: (1) Prepare general journal entries to enter the transactions. (2) Prepare the adjusting entry necessary on March 31 if financial statements are to be prepared at that time. (3) Describe how the various items would be shown in the financial statements. (c) Which of the two methods do you prefer and why
Some of the transactions of Duder Company during March are listed
below. Duder uses the periodic inventory method.
March 8 Purchased merchandise on account, $15,000, terms 1/10, n/30.
11 Returned part of the purchase of March 8, $2,200, and received credit on account.
17 Purchased merchandise on account, $16,000, terms 2/10, n/30.
26 Paid invoice of March 17 in full.
27 Purchased merchandise on account, $36,000, terms 2/10, n/60.
Instructions
(a) Assuming that purchases are recorded at gross amounts and that discounts are to be recorded when taken:
(1) Prepare general
(2) Describe how the various items would be shown in the financial statements.
(b) Assuming that purchases are recorded at net amounts and that discounts lost are treated as financial expenses:
(1) Prepare general journal entries to enter the transactions.
(2) Prepare the
(3) Describe how the various items would be shown in the financial statements.
(c) Which of the two methods do you prefer and why
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 4 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
![College Accounting (Book Only): A Career Approach](https://www.bartleby.com/isbn_cover_images/9781337280570/9781337280570_smallCoverImage.gif)
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
![College Accounting (Book Only): A Career Approach](https://www.bartleby.com/isbn_cover_images/9781337280570/9781337280570_smallCoverImage.gif)
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
![College Accounting (Book Only): A Career Approach](https://www.bartleby.com/isbn_cover_images/9781305084087/9781305084087_smallCoverImage.gif)
![Financial And Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337902663/9781337902663_smallCoverImage.jpg)
![Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337272124/9781337272124_smallCoverImage.gif)