and 3. The percentage change in compar b. Evaluate the sales performance of Sunshine's Department Problem 6.4B Mary's TV uses a perpetual inventory system. The following are three recent merchandising transactions: 6 Mar. Purchased eight TVs from CityOne Industries on account. Invoice price, $3,500 per unit, for a total of $28,000. The terms of purchase were 2/10. n/30. Sold two of these televisions for $6.000 cash. Paid the account payable to CityOne Industries within the discount period. 11 Mar. 16 Mar. Instructions a. Prepare journal entries to record these transactions assuming that Mary's records purchases of goods at: 1. Net cost. 2. Gross invoice price. b. Assume that Mary's did not pay CityOne Industries within the discount period but instead paid the full invoice price on 6 April. Prepare journal entries to record this payment assuming that the original liability had been recorded at: 1. 2. Net cost. Gross invoice price. c. Assume that you are evaluating the efficiency of Mary's bill-paying procedures. Which accounting method-net cost or gross invoice price-provides you with the most useful infor- mation? Explain. Problem 6.5B The following is a series of related transactions between Hip Pants and Sleek, a chain of retail clothing stores: 12 Oct. Hip Pants sold Sleek 300 pairs of pants on account, terms 1/10, n/30. The cost of these pants to Hip Pants was $80 per pair, and the sales price was $240 per pair. 15 Oct. Wings Express charged $400 for delivering the goods to Sleek. These charges were split evenly between the buyer and the seller and were paid immediately in cash. 16 Oct. Sleek returned four pairs of pants to Hip Pants because they were the wrong size. Hip Pants allowed Sleek full credit for this return. 22 Oct. Sleek paid the remaining balance due to Hip Pants within the discount period. Both companies use a perpetual inventory system. a. c. Instructions Record this series of transactions in the general journal of Hip Pants. (The company records sales at gross sales price.) b. Record this series of transactions in the general journal of Sleek. (The company records purchases of goods at net cost and uses a Transportation-in account to record transportation charges on inbound shipments.) Sleek does not always have enough cash on hand to pay for purchases within the discount period. However, it has a line of credit with its bank, which enables Sleek to easily borrow money for short periods of time at an annual interest rate of 12 percent. (The bank charges interest only for the number of days until Sleek repays the loan.) As a matter of general policy, should Sleek take advantage of 1/10, n/30 cash discounts even if it must borrow the money to do so at an annual rate of 12 percent? Explain fullyand illustrate any supporting computations