Piedmont Company purchased merchandise on account from a supplier for $30,000, terms
1/10, n/30. Piedmont Company returned $4,000 of the merchandise and received full credit.
a. If Piedmont Company pays the invoice within the discount period, what is the amount of cash required for the payment?
b. Under a perpetual inventory system, what account is debited by Piedmont Company to record the return?
Answer:
a. $25,740. Purchase of $30,000 less the return of $4,000 less the discount of $260 [($30,000 – $4,000) × 1%].
b. Accounts Payable
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