Taos Company purchased merchandise for resale from Tuscon Company with an invoice price of $20,100 and credit terms of 2/10, n/60. The merchandise had cost Tuscon $13,708. Taos paid within the discount period. Assume that both buyer and seller use a perpetual inventory system.

1(a)	Prepare entries that the buyer should record for the purchase. (Omit the "$" sign in your response.)

General Journal	Debit	Credit
(Click to select) Salaries payable Sales discounts Sales Accounts receivable Cash Merchandise inventory Cost of goods sold Accounts payable
(Click to select) Sales Accounts payable Sales discounts Merchandise inventory Accounts receivable Cash Cost of goods sold Salaries payable

1(b)	Prepare entries that the buyer should record for the cash payment. (Omit the "$" sign in your response.)

General Journal	Debit	Credit
(Click to select) Accounts receivable Accounts payable Merchandise inventory Sales discounts Cost of goods sold Cash Salaries payable Supplies
(Click to select) Supplies Cash Accounts payable Merchandise inventory Accounts receivable Cost of goods sold Sales discounts Salaries payable
(Click to select) Accounts receivable Supplies Cash Salaries payable Cost of goods sold Accounts payable Merchandise inventory Sales discounts

2(a)	Prepare entries that the seller should record for the sale. (Omit the "$" sign in your response.)

General Journal	Debit	Credit
(Click to select) Cash Sales Selling expenses Merchandise inventory Sales discounts Accounts payable Salaries payable Accounts receivable
(Click to select) Merchandise inventory Selling expenses Accounts receivable Salaries payable Sales discounts Cash Sales Accounts payable
(Click to select) Merchandise inventory Sales Cost of goods sold Accounts receivable Cash Sales returns and allowances Accounts payable Sales discounts
(Click to select) Accounts payable Sales returns and allowances Sales Cash Sales discounts Accounts receivable Cost of goods sold Merchandise inventory

2(b)	Prepare entries that the seller should record for the cash collection. (Omit the "$" sign in your response.)

General Journal	Debit	Credit
(Click to select) Merchandise inventory Unearned revenue Sales allowance Sales discounts Cash Accounts receivable Salaries payable Accounts payable
(Click to select) Salaries payable Accounts receivable Merchandise inventory Cash Sales discounts Unearned revenue Accounts payable Sales allowance
(Click to select) Accounts receivable Salaries payable Merchandise inventory Accounts payable Sales discounts Sales allowance Unearned revenue Cash

3.

Assume that the buyer borrowed enough cash to pay the balance on the last day of the discount period at an annual interest rate of 11% and paid it back on the last day of the credit period. Compute how much the buyer saved by following this strategy. (Use 365 days a year. Round your intermediate calculations and final answer to 2 decimal places. Omit the "$" sign in your response.)

Buyer's net savings

$