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A company purchased $3,100 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $850 worth of merchandise. On July 12, it paid the full amount due. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the payment on July 12 is:

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Answer:

Debit Accounts Payable $2250

Credit Merchandise Inventory $67.50

Credit Cash $2,182.50

Explanation:

Based on the information given Assuming the company uses a perpetual inventory system to t records the purchases using the gross method, the correct journal entry to record the payment on July 12 will be :

Debit Accounts Payable $2250

($3100-$850)

Credit Merchandise Inventory $67.50

[(3%*3100)-(3%*850)]

Credit Cash $2,182.50

($2250-$67.50)