Question 1 Swifty Corp. purchases inventory costing $4,410 on July 11 on terms 4

Question

Question 1 Swifty Corp. purchases inventory costing $4,410 on July 11 on terms 4/10, n/30, and pays the invoice in full on July 15. Prepare the required entries to record the two transactions, assuming Swifty uses (1) the gross method of recording purchases, and (2) the net method of recording purchases. Assume the periodic method is used. (Round answer to o decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit

Explanation / Answer

JOURNAL ENTRY WHEN PAYMENT MADE ON JULY 15 :

NET METHOD :

JOURNAL ENTRY WHEN PAYMENT MADE ON JULY 31 :

NET METHOD :

DATE ACCOUNTS & EXPLANATION DEBIT CREDIT GROSS METHOD July 11 Purchase a/c 4410       Acccount payable a/c 4410 (To record purchase) July 15 Account payable a/c 4410       Cash a/c 4234       Purchase discount a/c 176 (TO record amount paid)

NET METHOD :

July 11 Purchase a/c 4234      Account payable a/c 4234 (To record purchase) July 15 Account payable a/c 4234       Cash a/c 4234 (To record payment made

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