Question 4 (8 points)
Alpha Company used the periodic inventory system for purchase & sales of merchandise. Discount terms for both purchase & sales are, FOB Destination, 2/10, n30 and the gross method is used.
> Alpha Company sold on account $2,500 of merchandise to Bravo Company on May 2, 2016. Selling price was $4,000
> Bravo Company returned, to Alpha Company, $250 of this merchandise on May 3, 2016. Merchandise was sold for $400
> Freight charges related to this transaction of $150 were paid by Alpha Company.
Use this information to prepare Alpha Company’s General Journal entry (without explanation) for the payment for merchandise on May 15. If no entry is required then write “No Entry Required.”
Question 4 options: