On April 11, Edwards Construction Company purchased inventory for $20,000 on terms of 2/10, n/30. It pays
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1. Prepare the journal entries to record the purchase and payment using each of the following methods:
(a) Gross price,
(b) Net price.
2. If the company sold half the inventory during April for $12,000, how much income would it recognize under each method?
3. Assume that the invoice was misfiled and, as a result, the company did not pay until April 30. Prepare the journal entries to record the purchase and payment under each of the methods. If the company sold half the inventory during April for $12,000, how much income would it recognize under each method?
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Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
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