Crane Corp. purchased merchandise during 2020 on credit for $805,000; terms 2/10, n/30. All of the gross liability except $120,000 was paid within the discount period. The remainder was paid within the 30-day term. At the end of the annual accounting period, December 31, 2020, 90% of the merchandise had been sold and 10% remained in inventory. The company uses a periodic system. (a) Your answer has been saved. See score details after the due date. Assuming that the net method is used for recording purchases, prepare the entries for the purchase and two subsequent payments. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Purchases Accounts Payable (To record the purchase at net amount) Accounts Payable Debit 780850 664450 Credit 780850 Accounts Payable (To record the purchase at net amount) Accounts Payable Cash (To record payment within the discount period) Accounts Payable Purchase Discounts Lost Cash (To record the final payment.) 664450 116400 3600 780850 664450 120000 (b1) What dollar amounts should be reported for the final inventory and cost of goods sold under the net method? Assume that there was no beginning inventory. Final inventory $ tA Amount Reported Cost of goods sold $ Save for Later Attempts: 0 of 1 used Submit Answer (b2) What dollar amounts should be reported for the final inventory and cost of goods sold under the gross method? Assume that there was no beginning inventory. 1. Assuming that the $13,700 discount is prorated between the cost of goods sold, 90%, and the final inventory, 10%. Final inventory Cost of goods sold Amount Reported 2. Assuming that the $13,700 discount is used to reduce cost of goods sold. Final inventory is carried at the gross amount. Amount Reported Final inventory Cost of goods sold $