Piere Imports uses the perpetual system in accounting for merchandise inventory and had the following transactions during the month of October.

Exercise 4-23D Recording purchases, sales, returns, and discounts: buyer and seller-perpetual and both net & gross methods LO P7

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Piere Imports uses the perpetual system in accounting for merchandise inventory and had the following transactions during the month of October.

Oct.           2           Purchased merchandise at a $4,500 price ($4,410 net), invoice dated October 2, terms 2/10, n/30.
            10           Received a credit memorandum toward the return of $750 ($735 net) of merchandise that it purchased on October 2.
            17           Purchased merchandise at a $8,400 price ($8,232 net), invoice dated October 17, terms 2/10, n/30.
            27           Paid for the merchandise purchased on October 17, less the discount.
            31           Paid for the merchandise purchased on October 2. (Payment was mistakenly delayed, which caused the discount to be lost.)
(a) Prepare entries to record the above transactions assuming that Piere Imports records invoices at gross amounts.




Explanation

BUYER—Perpetual & Gross Method
Oct.           27           Record payment for merchandise less the discount. ($8,400 × .02) = $168.
Oct.           31           Record payment for merchandise less the returns. ($4,500 – $750) = $3,750.

Thank you!