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On June 24, 2012, Reed Company sold merchandise to Emily Clark for $75,000 with terms 2/10, n/30. On June 30, Clark paid $39,200, receiving the cash discount on her payment, and returned $10,000 of merchandise, claiming that it did not meet contract terms.
Assuming that Reed uses the perpetual inventory method, record the necessary journal entries on June 24 and June 30. The cost of merchandise to Reed Company is 60% of its selling price.
What are the two methods of accounting for treasury stock? Prepare the journal entry to record the purchase of treasury stock by the cost method.
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