| a. Apr. 10 | Inventory | 300,000 | — Suppose Sears uses the perpetual system and purchases sporting goods account from

Suppose Sears uses the perpetual inventory system and purchases $300,000 of sporting goods on account from Nike on April 10, 2017. Credit terms are 1/10, net 30. Sears pays electronically, and Nike receives the money on April 20, 2017.

Journalize Sears’

(a) Purchase and

(b) Cash payment transactions. What was Sears’ net cost of this inventory?

SOLUTION

Sears’s entries: