May Retailers purchased merchandise with a list price of $100,000,subject to a trade discount of 20 percent and credit terms of 2/10,n/30.At what amount should May record the cost of this merchandise if the gross method is used?

Question

Quizplus · Accepted Answer

Under the gross method, the purchase is recorded at the full list price before any discounts. Therefore, the cost of the merchandise is recorded at $100,000 minus the 20% trade discount, which equals $80,000.

May Retailers Purchased Merchandise with a List Price of $100,000,subject