7. VeCo, which uses the at gross. On October VeCo Terms are 2/10, n/40. O On Oct

Question

7. VeCo, which uses the at gross. On October VeCo Terms are 2/10, n/40. O On October 11 October 11? eperpetual method, records merchandise purchases er 3, VeCo buys $42,000 of merchandise on account. On October 9, VeCo returns goods that cost $10,000. meth eco pays $31,360. What entry does VeCo record on a. Accounts Payable 31,360 31,360 Cash b. Accounts Payable 32,000 Cash Purchase Discounts 31,360 640 32,000 c. Accounts Payable Inventory d. Accounts Payable 31,360 Cash 640 31,360 640 31,360 640 Purchase Discounts Cash Inventory Moro bagi inc nnarations in Anril uses the perpetual method, and records

Explanation / Answer

(7) For perpetual inventory, Journal Entry :-

        Accounts Payable 32000

                    Cash                    31360

                    Inventory              640

C Entry is correct

(8)

Purchase on 4 April

3000

(-) Inventory(Payment on 16 April) (3000 * 1%)

-30

Purchase on 11 April

9000

Inventory Value

11970

Option B is correct

(9)

Purchase in June

195000

(-) Return Inventory

-3000

(-) Sale

-7000

(+) Sale Return

                7000

Inventory Value

192000

Option C is correct

(10)

List Price (130 * 800)

104000

(-) Volume Discount (104000 * 15%)

-15600

Net Purchase Price

88400

(-) Sold 70% cases

-61880

Umsold Merchandise

26520

Option C is correct

Purchase on 4 April

3000

(-) Inventory(Payment on 16 April) (3000 * 1%)

-30

Purchase on 11 April

9000

Inventory Value

11970

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