Rae Company Uses a Perpetual Inventory System and Made a Purchase

question 37

Short Answer

Rae Company uses a perpetual inventory system and made a purchase of merchandise on credit from Tyree Corporation on August 3, for $9,000, terms 2/10, n/45. On August 10, Rae makes the appropriate payment to Tyree. The entry on August 10 for Rae Company is a. $\begin{array}{lr}\text {Accounts Payable }\quad\quad\quad\quad\quad\quad\quad&9,000\\\text {Cash }&&9,000\\\end{array}$

b. $\begin{array}{lr}\text { Accounts Payable.}\quad\quad\quad\quad\quad\quad\quad&8,820\\\text {Cash }&&8,820\\\end{array}$

c. $\begin{array}{lr}\text {Accounts Payable. }&9,000\\\text { Purchase Returns and Allowances }&&180\\\text {Cash }&&8,820\\\end{array}$

d. $\begin{array}{lr}\text {Accounts Payable. }\quad\quad\quad\quad\quad\quad\quad&9,000\\\text {Inventory }&&180\\\text {Cash }&&8,820\\\end{array}$

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Definitions:

Production Manager

A professional responsible for overseeing the production process in a manufacturing facility, ensuring that goods are produced efficiently, on time, and within budget.

Production Line

A manufacturing process in which parts or ingredients are added in sequence until the final product is assembled.

Kaoru Ishikawa

A prominent Japanese organizational theorist known for his contributions to quality management, including the development of the Ishikawa or fishbone diagram.

Fishbone Diagram

A visual tool used for identifying the root causes of a problem, named for its resemblance to a fish's skeleton.