Net Escape Computers uses a perpetual inventory system. The following are three recent merchandising transactions: August 10 Purchased 15 Computers from HP Computers on account. Invoice price, P64,500 per unit, for a total of P967,500. The terms of purchase were 2/10, n/30. August 15 Sold one of these computers for P77,400 cash. Augsut 20 Paid the account payable to HP computers within discount period Instructions: a. Prepare journal entries to record these transactions assuming that Net Escape records purchases of merchandise at: 1) Net Cost 2) Gross Invoice Price b. Assume that Net Escape did not pay HP Computers within the discount period but instead paid the full invoice price on Sept 10. Prepare journal entries to record this payment assuming that original liability had been recorded at: 1) Net Cost 2) Gross Invoice Price Problem 2 The following is a series of related transactions between Bench Clothing Line, a shoe wholesaler and Ready to Wear Store, a chain of retail RTW stores: July 9 Bench Clothing Line sold Ready to Wear Store 300 pieces of T Shirts on account, terms 4/10, n/45. The cost of thes T Shirts to Bench was P390 per shirt and the sales price was P975 per shirt. July 12 UPS Parcels charged P1,800 for delivering this merchandise to Ready To Wear Store. These charges were split evenly between the buyer and seller and were paid immediately in cash. July 13 Ready to Wear Store returned 15 shirts to Bench Clothing Line because they were wrong size. Bench Clothing allowed Ready To Wear Store full credit for this return. July 19 Ready To Wear Store paid the remaining balance due to Bench Clothing Line within the discount period. Both companies use a perpetual inventory system. Instructions: a. Record this series of transactions in the general journal of Bench Clothing Line. b. Record this series of transactions in the general journal of Ready to Wear Store (the company records purchases of merchandise at net cost. Freight In account is used for inbound deliveries. c. Ready to Wear Store has an existing credit line from FLI Financing and can borrow money for shot periods of time at an monthly rate of 4.5 percent. Should Ready to Wear pay Bench Clothing within the discount period and draw from its credit line with FUL Financing? Explain? What is the effective annual rate of the Financing company and discount to be availed