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Old MathJax webview 2. Ashley Ltd is a major supplier of Smart (Pty) Ltd. The normal credit terms of Ashley Ltd are 30 days. The
Old MathJax webview
2. Ashley Ltd is a major supplier of Smart (Pty) Ltd. The normal credit terms of Ashley Ltd are 30 days. The terms of the supply of Ashley Ltd are to offer settlement discount of 3.42% to those customers who pay their debt within a period of 10 days from the date of the invoice. Smart (Pty) Ltd has been hard hit by the Covid 19 Pandemic and is unsure where the funds for the next month's salaries will come from. On 1 October 2020 the purchase manager of Smart (Pty) Ltd placed an order with Ashley Ltd to buy trading inventory. The inventory together with an invoice was delivered to the premises of Smart (Pty) Ltd on the 22 October 2020. The invoice amount of N$98 000 is payable on or before 22 November 2020. Both companies are VAT vendors and make use of the perpetual inventory system. Round off to the nearest Dollar. Wildina processed the following journal on 22 October 2020: 2020 Cr 22 Oct Trading inventory (SFP) 82 303 VAT Input (SFP) 12 345 Payable (SFP) 94 648 Recognise trading inventory and payable Dr Process the correcting journal entry (if any). 2 A. DR Payable - N$94 648; CR VAT input - N$12 345 and CR Trade Inventory - N$82 303 B. DR Trade Inventory - N$2 914; DR VAT INPUT - N$437 and CR Payable - N$3 352 C. DR Trade Inventory - N$85 217; DR VAT input - N$12 783 and CR Payable - N$98 000 D. Wildina's journal entry is correct as it is. No entry to be made
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