Question

Required information (The following information applies to the questions displayed below.] Tracy Company, a manufacturer of air conditioners, sold 240 units to Thomas Company on November 17, 2021. The units have a list price of $350 each, but Thomas was given a 40% 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 2. Record the purchase of air conditioners.

Answer 1

1
		Debit	Credit
November 17,2021	Inventory	50400		=(240*350)*(1-40%)
	Accounts Payable		50400
November 26,2021	Accounts Payable	50400
	Inventory		1008	=50400*2%
	Cash		49392
2
		Debit	Credit
December 15,2021	Accounts Payable	50400
	Cash		50400