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Part 1: Problem On October 18,2018, Nana Enterprises bought 95 tables on account at $75 each....

Part 1: Problem

On October 18,2018, Nana Enterprises bought 95 tables on account at $75 each. Terms of the purchase were 10/25, n/45. It paid for all tables on October 30, 2018.

A. Assuming that Nana Enterprises uses the gross method and the periodic inventory system, prepare the required journal entries for the year 2018.  

B. Assuming that Nana Enterprises uses the net method and the perpetual inventory system, prepare the required journal entries for the year 2018.

Business   Accounting   
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Homework Answers

Answer #1

a) Journal entries

Date account and explanation debit credit
Oct 18 Purchase (95*75) 7125
Account payable 7125
(To record purchase)
Oct 30 Account payable 7125
Cash (7125*90%) 6412.50
Purchase discount 712.50
(To record payment)

b) Journal entries

Date account and explanation debit credit
Oct 18 Merchandise inventory (7125*90%) 6412.50
Account payable 6412.50
(To record purchase)
Oct 30 Account payable 6412.50
Cash 6412.50
(To record payment)
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