Cruise industries purchased $10,800 of merchandise on February 1, 2007, subject to a discount trade of 10% and with credit terms of 3/15, n/60. It returned $2,500 (gross price before trade or cash discount) on February 4. The invoice was paid on February 13.

At what amount would the purchase on February 1 be recorded if the net method were used?

Is this right?
10,800 x 10% =1080
10,800 -1080 = 9720
9720 x 3% = 291.60
9720 - 291.60 = $9428.40 net.

Therefore, the purchase on February 1 would be recorded at $9428.40 if the net method were used.

To find the purchase amount recorded using the net method, we need to consider the different discounts and returns involved in the transaction.

1. First, calculate the trade discount:
The trade discount is given as 10% of $10,800.
10% of $10,800 = $1,080

2. Subtract the trade discount from the original purchase amount:
$10,800 - $1,080 = $9,720

3. Next, calculate the cash discount:
The credit terms are given as 3/15, n/60, which means a 3% discount is available if payment is made within 15 days.

4. Determine if the cash discount is applicable:
Since the invoice was paid on February 13, which is within 15 days of February 1, the cash discount is applicable.

5. Calculate the cash discount amount:
3% of $9,720 = $291.60

6. Subtract the cash discount from the net amount after trade discount:
$9,720 - $291.60 = $9,428.40

Therefore, if the net method were used, the purchase on February 1 would be recorded as $9,428.40.

To determine the amount at which the purchase on February 1 would be recorded using the net method, we need to calculate the net price after taking into account the discount and return.

1. Discount calculation:
The purchase amount is $10,800. Applying a discount of 10%, the trade discount would be:
$10,800 x 10% = $1,080

2. Subtracting the trade discount from the purchase amount:
$10,800 - $1,080 = $9,720

3. Return calculation:
The return amount is $2,500 (gross price before trade or cash discount).

4. Subtracting the return amount from the net purchase amount:
$9,720 - $2,500 = $7,220

Therefore, the purchase on February 1 would be recorded at $7,220 if the net method were used.