merchandise \"as is\" (with no returns) from Mesa Wholesalers with credit terms

Question

merchandise "as is" (with no returns) from Mesa Wholesalers with credit terms of 3/10, n 60 and 29 system enee olingpurch sed merchandse hier 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 the discount period discount period, and (c) cash payment after 2. Prepare entries that the seller records for the (a) sale,(to) cash collection within the discount penod, and ic) cash collection after the discount period Complete this question by entering your answers in the tabs below Required 1 Required 2 Prepare entries that the seller records for the (a) sale, (b) cash collection within the discount period, and (e) cash collection after the discount period View transaction list Journal entry worksheet Record the merchandise had cost Mesa $17,323 Note: Enter debts before credds

Explanation / Answer

1 BUYER- Santa Fe Company Transaction General Journal Debit Credit a Credit Purchase Merchandise Inventory 25,400 Accounts Payable 25,400 Purchased merchandise on credit. b Cash Payment Accounts Payable 25,400 Merchandise Inventory* 762 Cash    24,638 *[25,400 x 3%] Paid account payable within 3% discount period. c Cash Payment-without discount Accounts Payable 25,400 Cash    25,400 Paid account payable after discount period. 2 SELLER – Mesa Company a Credit Sale Accounts Receivable 25,400 Sales 25,400 Sold merchandise on account. Cost of Goods Sold 17,323 Merchandise Inventory 17,323 To record cost of sale. b Cash Collection Cash 24,638 Sales Discounts 762 Accounts Receivable 25,400 Collected account receivable. c Cash Collection-without discount Cash 25,400 Accounts Receivable 25,400 Collected account receivable.

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