Question

Required information [The following information applies to the questions displayed below.] Tracy Company, a manufacturer of air conditioners, sold 100 units to Thomas Company on November 17, 2021. The units have a list price of $500 each, but Thomas was given a 30% trade discount. The terms of the sale were 2/10, n/30. Thomas uses a perpetual inventory system. Required: 1. Prepare the journal entries to record the (a) purchase by Thomas on November 17 and (b) payment on November 26, 2021. Thomas uses the gross method of accounting for purchase discounts. 2. Prepare the journal entry for the payment, assuming instead that it was made on December 15, 2021. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entries to record the (a) purchase by Thomas on November 17 and (b) payment on November 26, 2021. Thomas uses the gross method of accounting for purchase discounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet

Answer 1

Solution 1:

Journal Entries - Thomas Company
Date	Particulars	Debit	Credit
17-Nov-21	Inventory Dr	$35,000.00
	To Accounts payable		$35,000.00
	(To record purchase of inventory)
26-Nov-21	Accounts payable Dr	$35,000.00
	To Cash		$34,300.00
	To Inventory		$700.00
	(To record payment on account)

Solution 2:

Journal Entries - Thomas Company
Date	Particulars	Debit	Credit
15-Dec-21	Accounts payable Dr	$35,000.00
	To Cash		$35,000.00
	(To record payment on account)

Solution 3A:

Journal Entries - Thomas Company
Date	Particulars	Debit	Credit
17-Nov-21	Inventory Dr	$34,300.00
	To Accounts payable		$34,300.00
	(To record purchase of inventory)
26-Nov-21	Accounts payable Dr	$34,300.00
	To Cash		$34,300.00
	(To record payment on account)

Solution 3B:

Journal Entries - Thomas Company
Date	Particulars	Debit	Credit
15-Dec-21	Accounts payable Dr	$34,300.00
	Inventory Dr	$700.00
	To Cash		$35,000.00
	(To record payment on account)