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Consider the following transactions for
BigGuy Toys​:
Apr. 7 BigGuy Toys purchased $198,800 worth of MegoBlock toys on account with credit terms of 2/10, n/60.
Apr. 13 BigGuy Toys returned $19,800 of the merchandise to MegoBlock due to damage during shipment.
Apr. 15 BigGuy Toys paid the amount due, less the return and discount.

Required:
a. Journalize the purchase transactions. Explanations are not required.
b. In the final​ analysis, how much did the inventory cost BigGuy Toys​?

Respuesta :

Answer and Explanation:

a. The journal entries are shown below:

On April 7

Merchandise inventory $198,800

          To Account payable $198,800

(being the inventory purchase on account)

On April 13

Account payable $19,800

         To Merchandise inventory $19,800

(Being returned inventory is recorded)

On April 15

Account payable ($198,800 - $19,800) $179,000

          To Cash (98% of $179,000) $175,420

          To Merchandise inventory $3,580

(being the amount paid is recorded)

b. The inventory cost should be $175,420

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