Explanation Perpetual inventory system : The method or system of maintaining, recording, and adjusting the inventory perpetually throughout the year, is referred to as perpetual inventory system. Gross method: Under gross method, sales and purchases of merchandises are recorded at the full invoice price (gross amount) without the deduction of discounts. Prepare journal entries to record the purchases. Date Account title and Explanation Post ref. Amount Debit Credit (a) August 01 Merchandise Inventory $60,000 Accounts payable $60,000 (To record the purchase of merchandise invoiced for $60,000, credit terms of 2 / 10 , n / 30 ) (b) August 11 Accounts payable $60,000 Merchandise Inventory (1) $1,200 Cash (2) $58,800 (To record the payment for merchandises within the discount period) Table (1) (a) August 01: T To record the purchase of merchandise invoiced for $60,000, credit terms of 2 / 10 , n / 30 : Merchandise Inventory is an asset and the value is increased due to the credit purchases on account. Therefore, debit Merchandise Inventory account with $60,000. Accounts Payable is a liability and it is increased due to the increase in the amount to be paid for purchases. Therefore, credit Accounts Payable account with $60,000. (b) August 11: To record the payment for merchandises within the discount period: Accounts Payable is a liability and is decreased because the company has paid the amount for the credit purchases. Therefore, debit Accounts Payable account with $60,000

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ISBN: 9781259690457

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Chapter 4, Problem 5QS

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Prepare the required journal entries for Company G on (a) August 1, and (b) August 11.

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Chapter 4, Problem 4QS

Chapter 4, Problem 6QS

Chapter 4 Solutions

FINANCIAL ACCOUNTING ACCT 2301 >IC<

Ch. 4 - Prob. 1MCQ Ch. 4 - Prob. 2MCQ Ch. 4 - Prob. 3MCQ Ch. 4 - Prob. 4MCQ Ch. 4 - Prob. 5MCQ Ch. 4 - Prob. 1DQ Ch. 4 - Prob. 2DQ Ch. 4 - Prob. 3DQ Ch. 4 - Prob. 4DQ Ch. 4 - Prob. 5DQ

Ch. 4 - Prob. 6DQ Ch. 4 - Prob. 7DQ Ch. 4 - Prob. 8DQ Ch. 4 - Prob. 9DQ Ch. 4 - Prob. 10DQ Ch. 4 - Prob. 11DQ Ch. 4 - Prob. 12DQ Ch. 4 - Prob. 13DQ Ch. 4 - Prob. 14DQ Ch. 4 - Prob. 15DQ Ch. 4 - Prob. 1QS Ch. 4 - Prob. 2QS Ch. 4 - Prob. 3QS Ch. 4 - Prob. 4QS Ch. 4 - Prob. 5QS Ch. 4 - Prob. 6QS Ch. 4 - Prob. 7QS Ch. 4 - Prob. 8QS Ch. 4 - Prob. 9QS Ch. 4 - Prob. 10QS Ch. 4 - Prob. 11QS Ch. 4 - Prob. 12QS Ch. 4 - Prob. 13QS Ch. 4 - Prob. 14QS Ch. 4 - Prob. 15QS Ch. 4 - Prob. 16QS Ch. 4 - Prob. 17QS Ch. 4 - Prob. 18QS Ch. 4 - Prob. 1E Ch. 4 - Prob. 2E Ch. 4 - Prob. 3E Ch. 4 - Prob. 4E Ch. 4 - Prob. 5E Ch. 4 - Prob. 6E Ch. 4 - Prob. 7E Ch. 4 - Prob. 8E Ch. 4 - Prob. 9E Ch. 4 - Prob. 10E Ch. 4 - Prob. 11E Ch. 4 - Prob. 12E Ch. 4 - Prob. 13E Ch. 4 - Exercise 4-14 Physical count error and...Ch. 4 - Prob. 15E Ch. 4 - Prob. 16E Ch. 4 - Prob. 17E Ch. 4 - Prob. 18E Ch. 4 - Prob. 19E Ch. 4 - Prob. 20E Ch. 4 - Prob. 1AP Ch. 4 - Prob. 2AP Ch. 4 - Prob. 3AP Ch. 4 - Prob. 4AP Ch. 4 - Prob. 5AP Ch. 4 - Prob. 6AP Ch. 4 - Prob. 1BP Ch. 4 - Prob. 2BP Ch. 4 - Prob. 3BP Ch. 4 - Prob. 4BP Ch. 4 - Prob. 5BP Ch. 4 - Prob. 6BP Ch. 4 - Prob. 4SP Ch. 4 - Prob. 1BTN Ch. 4 - Prob. 2BTN Ch. 4 - Prob. 3BTN Ch. 4 - Prob. 4BTN Ch. 4 - Prob. 5BTN Ch. 4 - Prob. 7BTN Ch. 4 - Prob. 9BTN

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