ACC 3 Exam ch. 4-5

a car dealer acquires a used car for 14000, with terms of FOB shipping point. Compute total inventory costs assigned to the used car if additional costs include the following: a. 250 for transportation-in b. 300 for shipping insurance c. 900 for car import duties d. 150 for advertising e. 1250 for sales staff salaries f. 180 for trimming shrubs

$14,000+$250+$300+$900= 15450

Find the acid test ratio: cash - 1490 accounts receivable - 2800 inventory- 6000 prepaid expenses- 700 accounts payable- 5750 other current liabilities- 850

(1490+2800)-6000-700= 2410 5750+850=6600 2410/6600= -.37

gross margin ratio: net sales- 675000 COGS- 459000 net income- 74250

(675000-459000)/675000= .32 32%

Average Inventory Formula

(Beginning Inventory + Ending Inventory) / 2

compute the amount to be paid within the discount period: 1. $5000 2/10, n/60 2. $20000 1/15, n/90 3. $75000 1/10, n/30 4. $10000 3/15, n/45

1. 2/100*5000=100 5000-100= 4900 2. 1/100*20000= 2000 20000-200= 19800 3. 1/100*75000= 750 75000-750= 74250 4. 3/100*10000= 300 10000-300 = 9700

determine the inventory costing method(SI,FIFO,LIFO,WA) best described by each of the following separate statements. Assume a period of increasing costs. 1. results in the highest cost of goods sold 2. yields the highest net income 3. has the lowest tax expense because of reporting the lowest net income 4. better matches current costs with revenues 5. precisely matches the costs of items with the revenues they generate

1. LIFO 2.FIFO 3.LIFO 4.LIFO 5.SI

multistep of single step income statement? 1. commonly reports detailed computations of net sales and other costs and expenses. 2. statement limited to two main categories(revenues and expenses) 3. reports gross profit on a separate line 4. separates income from operations from the other revenues and gains

1. multi 2. single 3. multi 4. multi

in taking a physical inventory at the end of year 1, grant company forgot to count certain units and understand ending inventory by $10000. Determine how this error affects each of the following. a. year 1 COGS b. year 1 net income c. year 2 COGS d. year 2 net income

1. overstated by 10000(ending inventory understated) 2. understated by 10000(overstated COGS) 3. understated by 10000(ending inventory of year 1 is understated) 4. overstated(understated COGS)

units acquired at cost units sold at retail 10 units @14 15 units @16 12 units sold

10*14=140 15*16=240 240+140=380 10+15=25 380/25=15.2 15.2*12=182.4

compute lower of cost or market for inventory skateboards: quantity:13 cost per unit: 350 market per unit: 425

13*350=4550

homestead crafts, a distributor of handmade gifts, operates out of owner Emma Finn's house. At the end of the current period, Emma looks over her inventory and fins that she has the following: a. 1300 units in her basement, 20 of which were damaged by water and cannot be sold b. 350 units in her van, ready to silver per a customer order, terms FOB destination c. 80 units out on consignment to a friend who owns a retail store How many total units should Emma include in her company's period-end inventory?

1300-20= 1280 1280+350+80= 1710

endor company begins the year with 140000 of goods in inventory. At year end, the amount in inventory has increased to 180000. COGS for the year is a 1200000. Compute endors inventory turnover and days sales in inventory. Assum there are 365 days in the year.

140000+180000/2=160000 1200000/160000=7.5 365/7.5=48.67 inventory turnover happens 7.5 times Days' sales in inventory is 48.67 days

a company has COGS of 85000, and an ending inventory of 18000. Its days' sales in inventory equals

18000/85000*365=77.29

The credit terms 2/10, n/30 are interpreted as:

2% cash discount if the amount is paid within 10 days, or the full balance due in 30 days.

^assume that they are using a specific identification inventory system. Its ending inventory consists of 20 units from the beginning inventory, 40 units from the July 3 purchase, and 45 units from the July 12 purchase. What is the dollar value of its ending inventory?

20*25=500 40*27=1080 45*28=1260 500+1080+1260=2840

A company purchased $2,000 of merchandise on August 15 with terms 1/10, n/30. On August 17, it returned $200 worth of merchandise. On August 18, it paid the amount due. The amount of the cash paid on August 18 equals:

2000-200=1800 1800*.01=18 1800-18=1782

acid test ratio: quick assets- 37500 current assets- 80000 current liabilities- 50000

37500/50000= .750

Telo Company's ledger on July 31, its fiscal year-end, shows merchandise inventory of $37,800 before accounting for any shrinkage. A physical count of its July 31 year-end inventory discloses that the cost of the merchandise inventory still available is $35900. Prepare the entry to record any inventory shrinkage

37800-35900= 1900 july 31. loss due to shrinkage 1900 inventory 1900

a company purchased 4500 of merchandise on May 1 with terms of 2/10, n/30. On May 6, it returned 250 of that merchandise. On May 8, it paid the balance owed for merchandise, taking any discount it is entitled to. The cash paid on May 8 is?

4500-250= 4250 100-2= 98 4250*.98= 4165

costs of $5000 were incurred to acquire goods and make them ready for sale. The goods were shipped to the buyer (FOB shipping point) for a cost of $200. Additional necessary costs of $400 were incurred to acquire the goods. No other incentives or discounts were available. Compute the buyers total coast of merchandise inventory.

500+200+400=5600

compute lower of cost or market for inventory mountain bikes: quantity: 11 cost per unit: 600 market per unit: 550

550*11=6050

calculate COGS: net sales - 550000 gross profit- 193000

550000-193000= 357000

calculate COGS: beginning inventory- 6000 purchases- 30000 purchases returns and allowances- 2000 ending inventory- 4000

6000+(30000-2000)-4000= 30000

July 1: beg inv- 75 units @ $25 each July 3: purchase- 348 units @ $27 each jult 8: sale- 300 units july 12: purchase- 257 units @ $28 each july 23: sale- 275 units assuming a perpetual lifo system is used. What is the dollar value of its ending inventory

75*25=1875 348*27=9396 348-300=48 257*28=7196 275 units sold 275-257=18 48-18=30 75*25=1875 30*27=810 1875+810=2685

July 1: beg inv- 75 units @ $25 each July 3: purchase- 348 units @ $27 each jult 8: sale- 300 units july 12: purchase- 257 units @ $28 each july 23: sale- 275 units assuming a perpetual fifo system is used. What is the dollar value of its ending inventory

75*25=1875 348*27=9396 the first sale would consist of all 75 units and 225 units from july 3 75*25= 1875 225*27=6075 1875+6075=7950 348-225= 123 123*27=3321 275-123=152 152*28=4256 3321+4256=7577 257-152=105 105*28=2940

calculate net sales: cash sales- 75000 credit sales- 320000 sales return and allowances- 13700 sales discounts- 6000

75000+320000-13700-6000= 375300

A company has net sales of $825,000 and cost of goods sold of $547,000. Its net income is $98,500. The company's gross profit and operating expenses, respectively, are:

825000-547000=278000 825000-547000-98500=179500

a solar panel dealer acquires a used panel for 9000, with terms of FOB shipping points. Compute total inventory costs assigned to the used panel if additional costs include the following. a. 1500 for sales staff salaries b. 280 for transportatio-in by train c. 110 for online advertising d. 135 for shipping insurance e. 550 for used panel restoration f. 300 for lawn care

9000+280+135+550=9965

purchase allowance

A price reduction to the buyer of defective or unacceptable merchandise.

On November 5, Z-Mart (buyer) issues a $30 allowance from Trex for defective merchandise.

A/P 30 merchandise inv. 30

On December 2, Z-Mart paid the amount due on the purchase of November 2.

A/P 500 cash 500

On November 12, Z-Mart paid the amount due on the purchase of November 2.

A/P 500 merchandise inv. 10 cash 490

balance sheet accounts as of Dec 31: create a classified balance sheet: buildings - 25000 accounts recievable- 2000 land - 15000 merchandise inventory- 7000 accounts payable- 5000 cash- 8000 notes payable(due in 7 years)- 30000 office supplies- 1000 common stock- 10000 retained earning- 6000 wages payable - 3000 accumulated depreciation-buildings- 4000

Assets: Cash: $8,000 Accounts Receivable: $2,000 Merchandise Inventory: $7,000 Office Supplies: $1,000 Total Current Assets: $18,000 PPE: Buildings: $25,000 Less: Accumulated Depreciation - Buildings: ($4,000) Net Buildings: $21,000 Land: $15,000 Total PP&E: $36,000 Current Liabilities: Accounts Payable: $5,000 Wages Payable: $3,000 Total Current Liabilities: $8,000 Long-Term Liabilities: Notes Payable (due in 7 years): $30,000 Total Long-Term Liabilities: $30,000 Equity: Common Stock: $10,000 Retained Earnings: $6,000 Total Equity: $16,000

trey starts a merchandising business on Dec 1 and enters into the following three inventory purchases. Also, on December 15, Monson sells 15 units for $20 each. purchases on December 7: 10 units@ $6 purchases on Dec 14: 20 units@ $12 purchases on Dec 21: 15 units@ $14 monson uses a perpetual inventory system. Determin the cost assigned to the Dec 31 ending inventory based on the FIFO method

December 7: 10 units @ $6 = $60 December 14: 20 units @ $12 = $240 December 21: 15 units @ $14 = $210 10*6=60 5*12= 60 20-5= 15 15*12= 180 15*14=210 210+180=390

trey starts a merchandising business on Dec 1 and enters into the following three inventory purchases. Also, on December 15, Monson sells 15 units for $20 each. purchases on December 7: 10 units@ $6 purchases on Dec 14: 20 units@ $12 purchases on Dec 21: 15 units@ $14 monson uses a perpetual inventory system. Determin the cost assigned to the Dec 31 ending inventory based on the LIFO method

December 7: 10 units @ $6 = $60 December 14: 20 units @ $12 = $240 December 21: 15 units @ $14 = $210 20-15=5 15*14= 210 5*12=260 10*6=60 240+60=330

^assuming the perpetual inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on specific identification. Of the units sold, eight are from the December 7 purchase and seven are from the December 14 purchase

December 7: 10 units @ $6 = $60 December 14: 20 units @ $12 = $240 December 21: 15 units @ $14 = $210 8*6=48 7*12=84 10-8=2 2*6=12 20-7=13 13*12= 156 15*4=210 12+156+210=378

^assuming the perpetual inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on specific indications. Of the units sold, eight are from the December 7 purchase and seven are from the December 14 purchase.

December 7: 10 units @ $6 = $60 December 14: 20 units @ $12 = $240 December 21: 15 units @ $14 = $210 8*6=48 7*12=84 10-8=2 2*6=12 20-7=13 13*12= 156 15*4=210 12+156+210=378

ownership of goods is transferred when delivered to the buyers place of business

FOB destination

ownership of goods transferred when the seller delivers goods to the carrier

FOB shipping point

McNeil Merchandising Company: Accumulated depreciation 700 Beginning inventory 5000 Ending inventory 1700 Expenses 1450 Net Purchases 3900 Net sale 9500

Goods available for sale: 5000+3900= 8900 Cost of goods sold: 5000+3900-1700= 7200 Gross Profit: 9500-7200 = 2300 Net Income: 2300-1450 = 850

The selected inventory costing method impacts:

Gross profit and net income.

create an income statement based on: sales discounts- 750 office salaries expense- 2000 rent expense-office space- 1500 advertising expense- 500 sales return and allowances - 250 office supplies expense- 500 cost of goods sold- 9000 sales- 20000 insurance expense- 1000 sales staff salaries expense- 2500

Income Statement For the year ended 12/31/2023 sales- 20000 sales discount- 750 sales return and allowances- 250 net sales - 19000 COGS- 9000 gross profit- 10000 office salary- 2000 rent expense- 1500 advertising expense- 500 office supplies- 500 insurance expense- 1000 sales staff expense- 2500 total expense- 8000 net income- 2000

Cost of goods sold:

Is the term used for the expense of buying and preparing merchandise for sale.

June 1. Purchased merchandise with a price of $450 and credit terms of n/45 June 9. Received a $50 allowance (for scratched merchandise) towards the June 1 purchase June 16. Paid the amount from the June 1 purchase, minus the June 9 allowance

June 1. Inventory 450 A/P 450 June 9. A/P 50 Inventory 50 June 16. A/P 400 cash/bank 400

The inventory costing method that results in the lowest taxable income in a period of rising costs is:

LIFO method.

May 1. sold merchandise for $600, with credit terms n/60. The cost of the merchandise is $400. May 9. the customer discovers slight defects in some units. TFC gives a price reduction(allowance) and credits the customer's accounts receivable for $40 to compensate for the defects June 4. The customer in the May 1 sale returned $75 of merchandise for full credit. The merchandise had which has cost $50, is returned to inventory. June 30. Received payment for the amount due fro the May 1 sale less the May 9 allowance and June 4 return

May 1. A/R 600 revenue 600 COGS 400 inventory 400 May 9. Sales allowances 40 A/R 40 June 4.Sales ret. + allowances 75 A/R 75 Inventory 50 COGS 50 June 30. cash 485 A/R 485

May 1 Purchased merchandise on account with a price of $800 and credit term of n/30 May 7 Returned merchandise that had a price of $100 May 31 Paid the amount due from the May 1 purchase, minus the May 7 return

May 1. inventory 800 A/P 800 May 7. A/P 100 Inventory 100 May 31. A/P 700 cash/bank 700

Beginning inventory + net purchases

Merchandise available for sale.

merchandise inventory

Merchandise inventory is reported on the balance sheet as a current asset. Merchandise inventory refers to products a company owns and intends to sell. Merchandise inventory cost includes the cost to buy the goods, ship them to the store, and make them ready for sale. Purchasing merchandise inventory is part of the operating cycle for a business. Current asset

purchase return

Merchandise returned by the purchaser to the supplier.

multiple-step income statement

Non-operating items are reported separately from operations. The first section of the statement reports gross profit. Interest revenue is included with other revenue and gains. Subtotals for total selling expenses and general and administrative expenses are reported.

Oct 1. sold merchandise for $1500 with credit terms n/30, invoice dated Oct 1. The cost of merchandise is $900. Oct 6. The customer is in the Oct 1 sale returned $150 of merchandise for full credit. The merchandise which has cost $90, is returned to inventory. Oct 9. Sold merchandise for $700 cash. Cost of the merchandise is $450. Oct 30. Received payment for the amount due from the October 1 sale, less the return on Oct 6.

Oct 1. A/R 1500 revenue 1500 COGS 900 inventory 900 oct 6. sales return 150 A/R 150 Inventory 90 COGS 90 oct 9. cash 700 revenue 700 COGS 450 inventory 450 oct 30. cash 1350 A/R 1350

FOB destination

Ownership transfers at the destination. Goods in transit owned by the seller. Transportation costs paid by the seller. Delivery expense # cash #

In applying the lower of cost or market method to LIFO inventory costing, market is defined as:

Replacement cost.

Each sales transaction for a seller of merchandise involved two parts

Revenue recorded (asset increased) from a customer. Cost of goods sold incurred (asset decreased) to a customer.

Sales discounts

Sales discounts on credit sales can benefit a seller by decreasing the delay in receiving cash and reducing future collection efforts.

gross profit section of multiple step income statement for vitamix

Sales: cash sales: 60000 sales on credit: 90000 total sales: 150000 sales returns: 11000 sales discounts: 2000 nets sales: 137000 COGS: 80000 gross profit: 57000

Credit Terms

Sellers can grant a cash discount to encourage buyers to pay earlier.

identify whether each description best applies to a periodic or perpetual inventory system: a. updates the inventory account only at period-end. b. requires an adjusting entry to record inventory shrinkage c. returns immediately affect the account balance of Merchandise inventory d. records cost of goods sold each time a sales transaction occurs e. provides more timely information to managers

a. periodic b. periodic c. perpetual d. perpetual e. perpetual

Apr 1. Sold merchandise for $3000 with credit terms n/30; invoice dated april 1. The cost of merchandise is $1800 Apr 4. The customer in the Apr 1. sale returned $300 of merchandise for full credit. The merchandise, which had cost $180, is returned to inventory. Apr 8. Sold merchandise for $1000 , with credit terms of 1/10, n/30; invoice dated Apr 8. Cost of the merchandise is $700 Apr 11. Recieved payment for the amount due from the Apr. 1 less than the return on Apr 4.

apr 1. A/R 3000 revenue 3000 cost of good sold 1800 inventory 1800 apr 4. sales return 300 A/R 300 Inventory 180 COGS 180 apr 8. A/R 1000 revenue 1000 COGS 700 inventory 700 apr 11. cash 2700 A/R 2700

Aug 1. purchased merchandise with an invoice of 60000 and credit terms of 3/10, n/30 Aug 11. paid supplier the amount owed from the aug 1 purchase

aug 1. inventory 60000 A/P 60000 aug 11. A/P 60000 cash/bank 60000

^assume the periodic inventory system is used. Determine the costs assigned to ending inventory when cost are assigned based on the FIFO method

beg inb. 320*3.0= 960 jan 9. 80*3.2= 256 jan 25. = 100*3.34= 334 320+80+100= 500 320 units sold in beg. inv. 30 sold jan 9. remaining: jan .9 50 jan 25. 100 (50*3.2)+(100*3.34)= 494

^ assuming the perpetual inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on the weighted average method.

beg inv. 320*3.0= 960 jan 9. 80*3.2= 256 320+80= 400 960+256= 1216 1216/400= 3.04 jan 25. 100*3.34 = 334 400+100=500 1216+335=1550 1550/500= 3.10 350*3.10=1085 500-350= 150 1550-1085= 465 150 units 465$

On January 26, the company sells 350 units. Ending inventory at Jan 31 totals at 150 units. beginning inventory on Jan 1: units- 320 unit cost- $3.00 purchase on Jan 9: units- 80 unit cost- $3.20 purchase on Jan 25: units- 100 unit cost- $3.34 Assume the perpetual inventory system is used. Determine the cost assigned to ending inventory when costs are assigned based on the FIFO method.

beg inv. 320*3.0= 960 jan 9. 80*3.2= 256 jan 25. 100*3.34 = 334 350- 320= 30 80- 30 = 50 50 at 3.20 100 at 3.34 (50*3.2)+(100*3.34)= 494

On January 26, the company sells 350 units. Ending inventory at Jan 31 totals at 150 units. beginning inventory on Jan 1: units- 320 unit cost- $3.00 purchase on Jan 9: units- 80 unit cost- $3.20 purchase on Jan 25: units- 100 unit cost- $3.34 Assume the perpetual inventory system is used. Determine the cost assigned to ending inventory when costs are assigned based on the LIFO method.

beg inv. 320*3.0= 960 jan 9. 80*3.2= 256 jan 25. 100*3.34 = 334 350-100-80= 170 320-170= 150 150 at 3.00 150*3= 450

^assume the periodic inventory system is used. Determine the costs assigned to ending inventory when cost are assigned based on the LIFO method

beg inv. 320*3.0= 960 jan 9. 80*3.2= 256 jan 25. = 100*3.34= 334 100+80=180 350-180= 170 When the sale is made: 170*3- 510 ending: 500-350= 150 150*3.0= 450

^assume the periodic inventory system is used. Determine the costs assigned to ending inventory when costs are assigned bas on the weighted average method.

beg inv. 320*3.0= 960 jan 9. 80*3.2= 256 jan 25. = 100*3.34= 334 320+80+100= 500 96-+256+335=1550 1550/3500=3.10 500-350=150 3.10*150= 465

Wattan company reports beginning inventory of 10 units at $60 each. Every week for four weeks it purchases an additional 10 units at respective costs of 61,62,65, and 70 per unit for weeks 1 through 4/ Compute the cost of goods available for sale and the units available for the four-week period. Assume that no sales occur during those 4 weeks.

beg. inventory - 10*60= 600 week 1- 10*61 = 610 week 2- 10*62 = 620 week 3- 10*65= 650 week 4- 10*70= 700 cost of goods sold= 600+610+620+650+700= 3180 units available= 10+10+10+10+10= 50

buyer pays after discount period

cash 1000 A/R 1000

buyer pays within discount period

cash 980 sales disc. 20 A/R 1000

time period that can pass before a customer's full payment is due

credit period

Time period in which a cash discount is available.

discount period

what amount will be reported as COGS for the 12 units that were sold? units acquired at cost units sold at retail: 10 units @ 46 20 units @ 48 12 units

first 10 in beg inv. last 2 in purchase 10*46=460 2*48=96 460+96=556

Confucius Bookstore's inventory is destroyed by a fire on Sep 5. The following data for the current year are available from the accounting records. Estimate the cost of the inventory destroyed. beg inventory jan 1. 190000 jan 1 through sep 5 purchases(net) 352000 jan 1 through sep 5 sales(net) 685000 current years estimated gross profit rate 44%

goods available for sale: 190000+352000=542000 gross profit: 685000*.44=301400 COGS 685000-301400=383600 ending inventory: 158400

difference between net sales and the cost of goods sold

gross profit

net purchases+ beg. inventory= COGS+ending inventory=

merchandise available for sale

Z-Mart purchases $250 of merchandise on June 1 with terms 2/10, n/60. On June 3, Z-Mart returns $50 of goods before paying the invoice. When Z-Mart pays on June 11, it takes the 2% discount only on the $200 remaining balance.

merchandise inv. 250 A/P 250 A/P 50 merch inv. 50 A/P 200 merch inv. 4 cash 196

Goods a company owns and expects to sell to it's customers

merchandise inventory

On November 2, Z-Mart purchased $500 of merchandise inventory on account; credit terms are 2/10, n/30.

merchandise inventory 500 A/P 500

On November 2, Z-Mart purchased $500 of merchandise inventory for cash.

merchandise inventory 500 cash 500

Z-Mart purchased merchandise on terms of FOB shipping point. The transportation charge is $75.

merchandise inventory 75 cash 75

sales revenue=

net sales+ sales return and allowances - sales discounts

cost of goods sold =

net sales- gross profit

gross profit =

net sales-COGS

find net sales, gross profit, and gross margin: sales- 150000 sales discounts- 5000 sales return and allowances- 20000 cost of goods sold- 79750

net sales: $150,000 - $5,000 - $20,000= 125000 gross profit: 125000-79750= 45250 gross margin: 45250/125000= /362 36.2%

compute net sales and gross profit: vitamix reports the following information for its year ended December 31; cash sales of 60000; sakes on credit of 90000; general and administrative expenses of 17000; sales return of 11000; cost of goods sold 80000; sales discount of 2000; and selling expense of 24000

net sales: (60000+90000)-(11000-2000)= 137000 gross profit: 137000- 80000= 57000

nov 5. purchased 600 units of product at a cost of $10 per unit. Terms of the sale are 2/10, n/60; the invoice is dated November 5 nov 7. returned 25 defective units from the November 5 purchase and received full credit nov 15. Paid the amount due from the November 5 purchase, minus the return on November 7

nov 5. inventory 6000 A/P 6000 nov. 7 A/P 250 inventory 250 nov 15. A/P 5750 purchase disc. 115 cash 5635 purchase discount: 2/100*5750

FOB shipping point

ownership transfers at shipping point. Goods in transit owned by the buyer. Transportation cost paid buy the buyer merchandise inv. # cash #

Purchaser's description of a cash discount received from a supplier of goods.

purchase discount

periodic inventory system

records cost of goods sold at the end of the period

perpetual inventory system

records cost of goods sold at the time of each sale

Z-Mart sold $1,000 of merchandise on credit. The merchandise has a cost basis to Z-Mart of $300. 2/10, n/45

revenue side of journal entry: A/R 1000 Sales 1000 Cost side of journal entry: COGS 300 merch inv. 300

indicate whether FIFO or LIFO results in the lower reported amount:

rising costs+loowest ending inventory=FIFO rising costs+lowest COGS=FIFO rising costs+lowest net income=LIFO falling costs+lowest ending inventory=LIFO falling costs+lowest COGS=LIFO falling costs+lowest net income=FIFO

sales return and allowances =

sales - sales discount- net sales

Seller's description of a cash discount granted to buyers in return for early payment.

sales discount

On March 12, Fret Company sold merchandise in the amount of $7,800 to Babson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Fret uses the perpetual inventory system and the gross method of accounting for sales. On March 15, Babson returns some of the merchandise. The selling price of the returned merchandise is $600 and the cost of the merchandise returned is $350. The entry or entries that Fret must make on March 15 is (are):

sales return and allowances 600 A/R 600 merchandise inventory 350 COGS 350

net sales =

sales- sales discounts- sales return and allowances

merchandising companies

sell products to earn revenue ex. Sporting goods, clothing, and auto parts stores

service companies

sell time to earn revenue ex. accounting firms, law firms, plumbing services

Sep 15. Purchased merchandise with an invoice price of $35000 and credit terms 2/5, n/15 Sep 29. paid supplier the amount owed on the Sep 15 purchase

sep 15. inventory 35000 A/P 35000 sep 29. A/P 35000 cash/bank 35000