Determine the amount to be paid in full settlement of each of two invoices, (a)

Question

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.

Freight Terms Determine the amount to be paid in full settlement of each of two invoices, (a) and (b), assuming that credit for retums and allowances was received prior to payment and that all invoices were paid within the discount period Freight Paid by Seller Returns and Allowances $15,000 Merchandise Freight Terms FOB shipping point, 1/10, n/30 FOB destination, 2/10, /30 $90,000 $1,000 b. 10,000 1,575 8,500 b.

Explanation / Answer

(a)

Amount to be paid in full settlement

= (Merchandise cost + Freight - Returns and allowances) x (1 - discount rate)

= ($90,000 + $1,000 - $15,000) x (1 - 1%)

= $76,000 x 99%

= $75,240

(b)

Amount to be paid in full settlement

= (Merchandise cost + Freight - Returns and allowances) x (1 - discount rate)

= ($110,000 + $1,575 - $8,500) x (1 - 2%)

= $103,075 x 98%

= $101,013.50

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.