On April 15, Jones, Inc. purchased merchandise inventory at an invoice price of
ID: 2504793 • Letter: O
Question
On April 15, Jones, Inc. purchased merchandise inventory at an invoice price of $350,000, with terms of 3/15, n/30.
Required:
a. Assuming that the full, appropriate payment was made on April 28, prepare journal entries to record the purchase and payment, using the:
(1) gross price method
(2) net price method
b. Assuming that the full, appropriate payment was made on May 15, prepare journal entries to record the payment, using the:
(1) gross price method
(2) net price method
Explanation / Answer
A
1
DATE
PARTICULARS
DEBIT
CREDIT
15-Apr
Accounts Receivable A/C
350000
To Sales A/C
350000
[Sales with term 3/15, n/30.]
28-Apr
Bank A/C
339500
Cash Discount A/C
10500
To Accounts Receivable A/C
350000
[Discount received as payment made within 15 days.]
2
DATE
PARTICULARS
DEBIT
CREDIT
15-Apr
Accounts Receivable A/C
339500
To Sales A/C
339500
[Sales with term 3/15, n/30.]
28-Apr
Bank A/C
339500
To Accounts Receivable A/C
339500
[Discount received as payment made within 15 days.]
B
1
DATE
PARTICULARS
DEBIT
CREDIT
15-Apr
Accounts Receivable A/C
350000
To Sales A/C
350000
[Sales with term 3/15, n/30.]
15-May
Bank A/C
350000
To Accounts Receivable A/C
350000
[No discount as payment made after 15 days.]
2
DATE
PARTICULARS
DEBIT
CREDIT
15-Apr
Accounts Receivable A/C
339500
To Sales A/C
339500
[Sales with term 3/15, n/30.]
15-May
Bank A/C
350000
To Sales Discount Forfeited A/C
10500
To Accounts Receivable A/C
350000
[No discount as payment made after 15 days.]
DATE
PARTICULARS
DEBIT
CREDIT
15-Apr
Accounts Receivable A/C
350000
To Sales A/C
350000
[Sales with term 3/15, n/30.]
28-Apr
Bank A/C
339500
Cash Discount A/C
10500
To Accounts Receivable A/C
350000
[Discount received as payment made within 15 days.]
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