Make the necessary journal entries to record purchase

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Question - ATTN recently won a new client, ErgSaph Co., by offering them a reduced sales price on one of their most popular products. They also offered ErgSaph special payment terms of 3/10, n/30, with the discount applying to any portion of their balance paid within the 10 days. ErgSaph's purchasing department was so pleased with the new agreement that they placed a large order on March 14, Year 5.

The details of the purchase are provided in the table below.

ATTN expects to receive the Net amount of the sales price.

Normal Purchase Price $125.00

Sales Price $112.50

Cost per Unit $106.25

Units Ordered 2,300

Make the necessary journal entries to record ErgSaph's original purchase, the payment of 40% of the bill on March 22nd, and the payment of the remainder of the bill on March 30th. ATTN uses the perpetual inventory system. ATTN reports only net sales revene on its Income Statement. Any contra revenue or additional discount forfeited revenue should be included in that net amount.

Reference no: EM131945281

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