On July 15, 2013, the Nixon Car Company purchased 1,000 tires from the Harwell Company for $50
Question:
On July 15, 2013, the Nixon Car Company purchased 1,000 tires from the Harwell Company for $50 each. The terms of the sale were 2/10, n/30. Nixon uses a periodic inventory system and the gross method of accounting for purchase discounts.
Required:
1. Prepare the journal entries to record the purchase on July 15 and payment on July 23, 2013.
2. Prepare the journal entry to record the payment on August 15, 2013.
3. If Nixon instead uses a perpetual inventory system, explain any changes to the journal entries created in requirements 1 and 2.
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Requirement 1 Purchase price 1000 units x 50 50000 July 15 2013 Purchases 50000 Accounts pay...View the full answer
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Related Book For
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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