Windsor Industries purchased $7,800 of merchandise on February 1, 2017, subject

Question

Windsor Industries purchased $7,800 of merchandise on February 1, 2017, subject to a trade discount of 10% and with credit terms of 3/15, n/60. It returned $2,100 (gross price before trade or cash discount) on February 4. The invoice was paid on February 13. Assuming that Windsor uses the perpetual method for recording merchandise transactions, record the purchase, return, and payment using the gross method. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts, Round answers to 0 decimal places, e.g. 6,578. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit SHOW LIST OF ACCOUNTS LINK TO TEXT VIDEO: SIMILAR EXERCISE

Explanation / Answer

SOLUTION

(A) Purchase Recorded Gross Method Perpetual

(B) Purchase Recorded Gross Method Periodic

(C)

Date Account titles and Explanation Debit ($) Credit ($) Feb.1 Inventory [$7,800 - ($7,800*10%)] 7,020   Accounts Payable 7,020 Feb.4 Accounts Payable [$2,100 - ($2,100*10%)] 1,890 Inventory 1,890 Feb.13 Accounts Payable ($7,020 - $1,890) 5,130 Inventory ($5,130 * 3%) 154 Cash 4,976

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