On August 1 of the current year, Scooby Company recorded purchases of P800,000 and

P1,000,000 under credit terms of 2/15, n/30. The payment due on the P800,000 purchase
was remitted on August 14. The payment due on the P1,000,000 was remitted on August 31.
Under the net method and the gross method, these purchases should be included at what
respective amounts in the determination of cost of goods available for sale?
a. P1,784,000 and P1,764,000
b. P1,764,000 and P1,800,000
c. P1,764,000 and P1,784,000
d. P1,800,000 and P1,764,000

NET METHOD
Aug 01 Purchases 784,000
Accounts Payable 784,000
To record purchase on account P800,000 X 98%

Aug 01 Purchases 980,000

Accounts Payable 980,000
To record purchase on account P1,000,000 X 98%

Aug 14 Accounts Payable 784,000

Cash 784,000
To record payment of Aug 01 purchases WITHIN the discount period

Aug 31 Accounts Payable 1,000,000

Cash 980,000
Purchase Discount Lost 20,000
To record payment of Aug 01 purchases BEYOND the discount period

GROSS METHOD
Aug 01 Purchases 800,000
Accounts Payable 800,000
To record purchase on account 2/15; N/30

Aug 01 Purchases 1,000,000

Accounts Payable 1,000,000
To record purchase on account 2/15; N/30

Aug 14 Accounts Payable 800,000

Cash 784,000
Purchase Discount 16,000
To record payment of Aug 01 purchases WITHIN the discount period

Aug 31 Accounts Payable 1,000,000

 Cash 1,000,000
To record payment of Aug 01 purchases BEYOND the discount period