BUISENESS MANAGEMENT
MERCHANDISING
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Question
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On September 12, Vander Company sold merchandise in the amount of $7, 400 to Jepson Company, with credit terms of 3/10, n/30. The cost of the items sold is $4, 800. Jepson uses the periodic inventory system and the gross method of accounting for purchases. Jepson pays the invoice on September 18, and takes the appropriate discount. The journal entry that Jepson makes on September 18 is:
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Purchases 7, 178Cash 7, 178
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Accounts payable 7, 400Credit Merchandise inventory 222Credit Cash 7, 178
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Accounts payable 7, 400Credit Purchases discounts 222Credit Cash 7, 178
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Cash 7, 178Accounts receivable 7, 178
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Cash 7, 178Purchases discounts 222Credit Accounts payable 7, 400
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Explanation:
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