Discounts On April 11, Edwards Construction Company purchased inventory for $30,000 on terms of 2/10, n/30. It pays the account balance on April 21. Edwards uses a periodic inventory system. Required:

1. Prepare the journal entries to record the purchase and payment using (a) gross price and (b) net price.

2. If the company sold half the inventory during April for $20,000, how much income would it recognize under each method?

3. Assume that the invoice was misfiled and, as a result, the company did not pay until April 30. Prepare the jour-nal entries to record the purchase and payment under each of the methods.

4. If the company sold half the inventory during April for $20,000, how much income would it recognize under each method?

5. Next Level Why was there a difference in income for the two methods as reported in Requirement 4