Santa Fe Retailing purchased merchandise \"as is\" (with no returns) from Mesa W

Question

Santa Fe Retailing purchased merchandise "as is" (with no returns) from Mesa Wholesalers with credit terms of 3/10, n/60 and an invoice price of $19,200. The merchandise had cost Mesa $13,094. Assume that both buyer and seller use a perpetual inventory system and the gross method 1. Prepare entries that the buyer records for the (a) purchase, (b) cash payment within the discount period, and (c) cash payment after the discount period 2. Prepare entries that the seller records for the (a) sale, (b) cash collection within the discount period, and (c) cash collection after the discount period. Complete this question by entering your answers in the tabs below Required 1Required 2 Prepare entries that the buyer records for the (a) purchase, (b) cash payment within the discount period, and (c) cash payment after the discount period

Explanation / Answer

Q1 Debit Credit a) Merchandise Inventory $        19,200 Accounts payable $        19,200 (Entry for purchasing inventory) b) Accounts payable $        19,200 Cash $        18,624 Merchandise Inventory $              576 (Paid with discount) c) Accounts payable $        19,200 Cash $        19,200 (Paid without discount) Q2 a) Accounts Receivables $        19,200 Sales $        19,200 (For booking sales) Cost of goods sold $        13,094 Merchandise inventory $        13,094 (For booking cost of goods sold) b) Cash $        18,624 Sales Discounts $              576 Accounts Receivables $        19,200 (For booking cash collection) c) Cash $        19,200 Accounts Receivables $        19,200 (For booking cash collection)

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