Addison Co. reports the information below.

May 1 Beginning Inventory (20,000 units @ $11.25)

May 2 Purchased 100,000 units @ $12.00 on terms 2/10, n/30

May 3 Returned 1,000 units from May 2^nd purchase

May 4 Sold 15,000 units @ $25.00

May 10 Purchased 40,000 units @ $12.50

Prepare the journal entries using the Gross Method assuming that payment is made on May 9^th. Addison uses the average cost method for inventory cost flow assumption and the perpetual inventory system.

the answer is: im not sure how to get 99000 in may 4th

May 2	Inventory 1,200,000 (100,000 x 12) A/P 1,200,000
May 3	A/P 12,000 (1,000 x 12) Inventory 12,000
May 4	Cash or A/R 375,000 (15,000 x 25) Revenue 375,000 CoGS 178,109 Inventory 178,109 20,000 x 11.25 = 225,000 =15,000*(225,000+1,200,000-12,000)/(20,000+99,000)
May 9	A/P 1,188,000 Inventory 23,760 Cash 1,164,240