a. Purchased $60,000 of merchandise from Sierra Co. on account, terms 1/10, n/30

Question

a. Purchased $60,000 of merchandise from Sierra Co. on account, terms 1/10, n/30.

b. Paid the amount owed on the invoice within the discount period.

For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".

c. Discovered that $10,000 of the merchandise was defective and returned items, receiving credit.

d. Purchased $7,500 of merchandise from Sierra Co. on account, terms n/30.

e. Received a check for the balance owed from the return in (c), after deducting for the purchase in (d).

Explanation / Answer

a. Purchased $60,000 of merchandise from Sierra Co on account, terms 1/10, n/30 Dr Merchandise inventory $60000 Cr Accounts Payable $60000 b. Paid the amount owed on the invoice within the discount period Dr AP $60,000 Cr Cash $59,400 Cr Merchandise inventory $400 c. Discovered that $10000 of the merchandise was defective and returned items, receiving a credit Dr AP $9900 Cr Merchandise inventory $9900 d. Purchased $7500 of merchandise from Sierra co on account, term n/30 Dr Merchandise inventory $7500 Cr AP $7500 e Received a check for the balance owed from the return in (c), after deducting for the purchase in (d) Dr Cash $2400 Cr AP $2400

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