Ask Question
31 July, 09:22

The Stationery Company purchased merchandise on account from a supplier for $9,900, terms 1/10, n/30. The Stationery Company returned merchandise with an invoice amount of $1,300 and received full credit. a. If The Stationery Company pays the invoice within the discount period, what is the amount of cash required for the payment? $ b. Under a perpetual inventory system, what account is credited by The Stationery Company to record the return?

+1
Answers (2)
  1. 31 July, 10:08
    0
    Section a. $8,514

    Section b. Purchase Return

    Explanation:

    Section a.

    To calculate the cash required, we first need to calculate Purchase after purchase return

    Purchase on merchandize = $9,900

    Returned merchandise = $1,300

    Discount = 1 percent

    Purchases after purchase return = $9,900 - $1,300 = $8,600

    Purchase after purchase return = $8,600

    Now let's calculate the Cash required

    Which we have as;

    Cash required = purchase after purchase return * (100 - 1) %

    Cash required = $8,600 * (100-1) % = $8,514

    =$8,600*99%

    =$,8,600

    Section b.

    Dr Accounts Payables = $86

    Cr Purchase Return = $86
  2. 31 July, 13:08
    0
    Part A. $8514

    Part B. Purchase Return

    Explanation:

    Part A. The cash required to payment is the inventory purchases after the sales return. And here the inventory purchases after purchase return are:

    Purchases after purchase return = $9,900 - $1,300 = $8600

    Now the discount available is 1%

    So this implies:

    Cash required = $8600 * (100-1) % = $8,514

    Part B. Now the double entry under perpetual inventory system would be:

    Dr Accounts Payables $86

    Cr Purchase Return $86
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “The Stationery Company purchased merchandise on account from a supplier for $9,900, terms 1/10, n/30. The Stationery Company returned ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers