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Q1. On June 1, the first day of operations, Candy Company purchased $1,000 of sweet merchandise inventory for cash. On June 10, Candy sold on credit all of the merchandise with a markup of 25% on cost. Prepare the general journal entries to record these two transactions assuming Candy uses (A) a perpetual inventory system and (B) a periodic inventory system.
Q2. Johnson Company purchased $10,000 of merchandise inventory on credit, terms 3/10, n/30. Johnson uses a periodic inventory system.
1) Prepare the general journal entry to record the cash payment for the purchase assuming a discount was received and the gross method of recording purchase discounts is used.
2) Prepare the general journal entry to record the cash payment for the purchase assuming the discount was forfeited and the net method of recording purchase discounts is used.
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