Question

Determining Amounts to be Paid on Invoices Determine the amount to be paid in full settlement of each of the following invoices, assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period: Merchandise Invoice Amount Freight Paid by Seller Customer Returns and Allowances a. $20,500 — FOB destination, n/30 $1,000 b. 11,400 $500 FOB shipping point, 1/10, n/30 1,400 c. 8,400 — FOB shipping point, 2/10, n/30 800 d. 3,800 200 FOB shipping point, 1/10, n/30 500 e. 3,200 — FOB destination, 1/10, n/30 — a. $ b. $ c. $ d. $ e. $

Answer 1

Answer:

a. $19,500

b. $10,400

c. $7,448

d.  $3,467

e.  $3,168

Explanation:

The amounts for each cases are shown below:

a. Total amount paid equals to

= Merchandise amount - return and allowances

= $20,500 - $1,000

= $19,500

b. Total amount paid equals to

= Merchandise amount -  return and allowances - discount  + freight charges

= $11,400 - $1,400 - $100 + $500

= $10,400

The discount = (Merchandise amount -  return and allowances) × discount rate

= ($11,400 - $1,400) × 1%

= $100

c.  Total amount paid equals to

= Merchandise amount -  return and allowances - discount  

= $8,400 - $800 - $152

= $7,448

The discount = (Merchandise amount -  return and allowances) × discount rate

= ($8400 - $800) × 2%

= $152

d. Total amount paid equals to

= Merchandise amount -  return and allowances - discount  + freight charges

= $3,800 - $500 - $33 + $200

= $3,467

The discount = (Merchandise amount -  return and allowances) × discount rate

= ($3,800 - $500) × 1%

= $100

e.  Total amount paid equals to

= Merchandise amount -  discount

= $3,200 - $32

= $3,168

The discount = Merchandise amount × discount rate

= $3,200 × 1%

= $32