Carlton Company Uses the Perpetual Inventory Method

Carlton Company uses the perpetual inventory method.On April 15,Carlton Company purchased merchandise inventory from Dixie Inc.with an invoice price of $70,000 and credit terms of 2/10,n/30.How would Carlton Company record this transaction?

A) Debit Merchandise Inventory for $70,000 and credit Cash for $70,000.
B) Debit Merchandise Inventory for $70,000 and credit Accounts Payable for $70,000.
C) Debit Merchandise Inventory for $68,600 and credit Accounts Payable for $68,600.
D) Debit Purchases for $70,000 and credit Accounts Payable for $70,000.
E) Debit Purchases for $68,600 and credit Accounts Payable for $68,600.

Correct Answer:

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