Final answer:
To calculate the purchases for Tracy Company with the 30% trade discount on the $500 list price per unit, multiply the discounted price of $350 by the 100 units sold for a total of $35,000. If Thomas Company pays within 10 days, they can take a 2% discount, reducing the total purchase price to $34,300.
Step-by-step explanation:
To calculate the purchase of air conditioners for the Tracy Company, we start with the list price and then apply the trade discount. The units have a list price of $500 each and Thomas Company received a 30% trade discount. So, the calculation for the purchase price per unit would be $500 minus 30% of $500, which equals a discounted price of $350 per unit. Since 100 units were sold, this results in a total purchase price of $350 x 100, equaling $35,000.
However, the terms were 2/10, n/30, which means that Thomas Company can take a 2% discount off the total purchase price if they pay within 10 days. If they choose to do this, the purchase price would be reduced by 2% of $35,000, which is $700. So the new total, if paid within 10 days, would be $35,000 - $700, equaling $34,300.
Thus, under the periodic inventory system, Thomas Company would record the purchase either at $35,000 if paid after 10 days or $34,300 if paid within the discount period.