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Discounts
Each of the following situations involves the use of discounts:
1. How much discount may SEALS Inc. take in each of the following transactions? What was the rusted i calculating the annualized rate use 360 days?
a. SEALS purchases inventory costing $900, 2/15, n/45.
b. SEALS purchases new office furniture costing $2,600, terms 1/10, n/30. s
2. Calculate the discount rate CROFT Co. received in each of these transactions.
a. CROFT purchased office supplies costing $800 and paid within the discount period with a check f or $738 with a check for $3,900
b. CROFT purchased merchandise for $4,000. It paid within the discount period with a check for $3,900.
Described certain transactions of Edwardson Corporation. The company uses the periodic inventory system - Make all the journal entries necessary to record the transactions above using appropriate dates.
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