5-2 1. BE.05-04.ALGO (Algorithmic) Freight Terms Determine the amount to be paid

Question

5-2

1. BE.05-04.ALGO (Algorithmic) Freight Terms Determine the amount to be paid in full settlement of each of two invoices, (a) and (b), assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period. If required, round the answers to the nearest dollar. Freight Freight TermsReturns and Merchandise Allowances Paid by Seller a. $8,200 b. 3,900 $400 100 FOB destination, 2/10, n/30 FOB shipping point, 1/10, n/30 $1,150 800 a. $ b.$

Explanation / Answer

a Under FOB destination, freight paid by seller is borne by seller Amount to be paid 6909 =(8200-1150)*(1-0.02) b Under FOB shipping, freight paid by seller is borne by buyer Amount to be paid 3169 =(3900-800)*(1-0.01)+100

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