Purchases transactions Bowers Company purchased merchandise on account from Saunders Corp. for $28,000, terms 1/10,...
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Purchases transactions Bowers Company purchased merchandise on account from Saunders Corp. for $28,000, terms 1/10, n/30 Bowers returned merchandise with an invoice amount of $5,500 and received full credit. a. If Bowers Company pays the invoice within the discount period, what is the amount of cash required for the payment? 27,720 X b. What account is debited by Bowers Company to record the return? Accounts Payable-Saunders Corp. Feedback Check My Work a. Since buyers normally take all purchase discounts, the net purchase price is recorded at the time of purchase. If the buyer makes a return of merchandise or is granted a price allowance for an invoice with a purchase discount, the amount of the return is recorded at the invoice price less the discount. b. Any discounts or returns are recorded directly by the buyer who reduces the balances of Accounts Payable and Merchandise Inventory, using a debit memo based on the net cost of the merchandise. 
77,720
Purchases transactions Bowers Company purchased merchandise on account from Saunders Corp. for $28,000, terms 1/10, n/30 Bowers returned merchandise with an invoice amount of $5,500 and received full credit. a. If Bowers Company pays the invoice within the discount period, what is the amount of cash required for the payment? 27,720 X b. What account is debited by Bowers Company to record the return? Accounts Payable-Saunders Corp. Feedback Check My Work a. Since buyers normally take all purchase discounts, the net purchase price is recorded at the time of purchase. If the buyer makes a return of merchandise or is granted a price allowance for an invoice with a purchase discount, the amount of the return is recorded at the invoice price less the discount. b. Any discounts or returns are recorded directly by the buyer who reduces the balances of Accounts Payable and Merchandise Inventory, using a debit memo based on the net cost of the merchandise.
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