Question: USA Imports uses the perpetual system in accounting for merchandise inventory and had the following transactions during the month of October. Prepare entries to record these transactions assuming that USA Imports records invoices
(a) at gross amounts and
(b) at net amounts. Oct.
2 Purchased merchandise at a $4,000 price, invoice dated October 2, terms 2y10, ny30. 10 Received a $400 credit memorandum (at full invoice price) for the return of merchandise that it purchased on October 2. 17 Purchased merchandise at a $4,400 price, invoice dated October 16, terms 2y10, ny30. 26 Paid for the merchandise purchased on October 17, less the discount. 31 Paid for the merchandise purchased on October 2. Payment was delayed because the invoice was mistakenly filed for payment today. This error caused the discount to be lost.