Question

Alison's dress shop buys dresses from McGuire Manufacturing. Alison purchased dresses from McGuire on July 17 and received an invoice with a list price amount of $5,700 and payment terms of 4/10, n/30. Alison uses the net method to record purchases. Alison should record the purchase at:

Answer 1

$5,472

Step-by-step explanation:

Calculation for Alison record of purchase :

First step

Invoice price ×Percentage of payment term

Where:

Invoice price =$5,700

Percentage of payment term =96%

(100%-4%)

Second step

$5,700×96%

=$5,472

Therefore Alison should record the purchase at: $5,472