Use the data in P 2 for this problem.

Required 1. Prepare entries in journal form (refer to the review problem) to record the transactions, assuming use of the periodic inventory system.

2. User Insight: Receiving cash rebates from suppliers based on the past year’s purchases is common in some industries. If at the end of the year, Tonia Company receives rebates in cash from a supplier, should these cash rebates be reported as revenue? Why or why not?

Internal Control