Q1.

In this question, you need to provide an amount for each transaction.

1- A merchandising company purchases merchandise inventory on credit, the credit terms are 2/10,n/30.

2- The company pays the amount due within the purchase discount period.

Required:

A. Record the journal entries for both transactions: issuance of the invoice, payment.

B. Prepare the T-Accounts for: Accounts Payable and Merchandise Inventory.

Q2-

On your own words, talk briefly about two of the inventory costing methods, give one example of each method.

Q3.

A- Explain how to calculate the net income for merchandising companies, why is it different than calculating the net income for service companies.

B- Prepare the income Statement for Yazeed merchandising company for December 2018 that has the followings:

Sales: 1,000,000

Sales discount: 20,000

Salaries expenses: 100,000

Advertising expenses: 100,000

Sales returns and allowances: 50,000

Insurance expenses: 10,000

Costs of Goods Sold: 450,000