Meteor Co Purchased Merchandise on March 4, 2013, at a Price

question 54

Essay

Meteor Co. purchased merchandise on March 4, 2013, at a price of $30,000, subject to credit terms of 2/10, n/30. Meteor uses the net method for recording purchases and uses a periodic inventory system.
Required:
1. Prepare the journal entry to record the purchase.
2. Prepare the journal entry to record the appropriate payment if the entire invoice is paid on March 11, 2013.
3. Prepare the journal entry to record the appropriate payment if the entire invoice is paid on April 2, 2013.

---

Definitions:

Indifference Curve

A graph that shows different combinations of two goods or services among which a consumer is indifferent, illustrating preferences and trade-offs.

Total Utility

The total satisfaction received from consuming a certain amount of goods or services.

Marginal Rate of Substitution

The rate at which a consumer is willing to give up one good in exchange for another good, while keeping overall utility constant.

Substitution Effect

A shift in consumer behavior as a result of alterations in the comparative costs of products, resulting in the replacement of one product for another.