Question

Jones Manufacturing purchased $10,000 of merchandise inventory on account from a vendor and paid a $500 freight bill. The credit terms are 2/10 or n/30. Because some of the merchandise was not needed, Jones Manufacturing returned $2,000 the same day. Jones Manufacturing uses the perpetual inventory system and made payment for the merchandise, less the return, within the discount period. What is the final cost of the merchandise inventory for Jones Manufacturing from this purchase?

Answer 1

$7,840

Step-by-step explanation:

the journal entries to record the purchase are:

Dr Merchandise inventory 10,000

Cr Accounts payable 10,000

Dr Merchandise inventory 500

Cr cash 500

Dr Accounts payable 2,000

Cr Merchandise inventory

Dr Accounts payable 8,000

Cr Cash 7,840

Cr Purchase discounts 160