Question

A retailer purchases merchandise with a catalog list price of $30, 000. The retailer receives a 15% trade discount and credit terms of 2/10, n/30. How much cash will be needed to pay this invoice within the discount period? a. $24, 990 b. $29, 400 c. $30, 000 d. $24, 900 Where are selling and administrative expenses found on the multiple-step income statement? a. After net income before expenses b. After gross profit c. Before gross profit d. After sales and before gross profit Emma Co. sold Isabella Co. merchandise on account FOB shipping point, . 2/10, net 30, for $15, 000. Emma Co. prepaid the $750 shipping charge. Using the perpetual inventory method, which of the following entries will Isabella Co. make to record payment of the merchandise if Isabella Co. pays within the discount period. a. Accounts Payable-Emma Co., debit $ 15, 750; Merchandise Inventory, credit $300; Cash, credit $15, 450 b. Accounts Payable-Emma Co., debit $ 15, 000; Freight In, debit $750; Cash, credit $15, 750 c. Accounts Payable-Emma Co., debit $ 15, 000; Freight In, credit $750; Cash, credit $14, 250 d. Accounts Payable-Emma Co., debit $15, 750; Merchandise Inventory, debit $300; Cash, credit $16, 050 What is the major difference between a periodic and perpetual inventory system? a. Under the periodic inventory system, all adjustments such as purchases returns and allowances and discounts are reconciled at the end of the month. b. Under the periodic inventory system, no journal entry is recorded at the time of the sale of inventory for the cost of the inventory. c. Under the periodic inventory system, the purchase of inventory will be debited to the Purchases account d. All are correct. Anthony Company sold Madison Company merchandise on account FOB shipping point, 2/10, net 30, for $10, 000. Anthony prepaid the $300 shipping charge. Which of the following entries does Anthony make to record this sale? a. Accounts Receivable-Madison, debit $10, 000; Sales, credit $10, 000, and Accounts Receivable-Madison, debit $300; Cash, credit $300 b. Accounts Receivable-Madison. debit $10, 000; Sales, credit $10, 000 c. Accounts Receivable-Madison, debit $10, 300; Sales, credit $10, 300 d. Accounts Receivable-Madison, debit $10, 000; Sales, credit $10, 000, and Freight Out, debit $300; Cash, credit $300