Freight Terms Determine the amount to be paid in full settlement of each of two

Question

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. Merchandise Freight Paid by Seller Freight Terms Returns and Allowances a. $7,050 $100 FOB shipping point, 2/10, n/30 $1,350 b. 3,800 700 FOB destination, 1/10, n/30 1,000 a. $ b. $

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.

Merchandise Freight
Paid by Seller Freight Terms Returns and
Allowances a. $7,050 $100 FOB shipping point, 2/10, n/30 $1,350 b. 3,800 700 FOB destination, 1/10, n/30 1,000

Explanation / Answer

a. Amount to be paid in full settlement = $7,050 - $1,350 - [($7,050 – $1,350) × 2%] + $100 = $5,686

b. Amount to be paid in full settlement = $3,800 - $1,000 - [($3,800 – $1,000) × 1%] = $2,772

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