The following events pertain to The Craft Shop, which began operations in Octobe

Question

The following events pertain to The Craft Shop, which began operations in October 2012. The company uses the perpetual inventory method.

1) Oct 1 Issues common stock to investors for $15,000

2) Oct 2 Purchased $12,000 of inventory on account with terms 2/10, n/30

3) Oct 3 Sold on account for $18,000 merchandise that had cost $10,000; terms 1/10, n/30

4) Oct 4 Returned defective merchandise with list price of $1,000 from Oct. 2 purchase

5) Oct 5 Paid frieght of $100 on goods sold to customers, FOB destination

6) Oct 10 Paid the amount due on the merchandise purchased Oct. 2

7) Oct 12 Received cash from customers in settlement of Oct 3. Sale

Required:

a. What was the amount of cash that The Craft Shop paid on October 10?

b. What was the amount of cash that The Craft Shop collected on October 12?

c. What was the balance in The Craft Shop's cash account at the end of the day on October 12?

Note : Please provide in an excel format(detailed)

Explanation / Answer

Question A

Amount

12000

Question B

Question C

Particulars

Amount

List price of Material Purchased on October 2

12000

Less: List price of material returned on Oct.4 1000 Net Material purchased 11000 Less: Discount as payment made within 10 days 11000*.02=220 Total payment made on October 10 10780

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