Determine the amount to be paid in full settlement of each of two invoices (a) and (b), assuming that credit for returns and all
owances 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. $6,100 $600 FOB shipping point, 2/10, n/30 $1,450
b. 2,900 700 FOB destination, 1/10, n/30 800
a. $
b. $
Merchandise Freight
Paid by Seller Freight Terms Returns and
Allowances
a. $6,100 $600 FOB shipping point, 2/10, n/30 $1,450
b. 2,900 700 FOB destination, 1/10, n/30 800
a. $
b. $
1 answer:
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Answer:
$11,870
Explanation:
Given:
List price = $168,000
Discount = 10%
Shipping cost = $1,000
Sales tax = $6,500
Salvage value = $40,000
Useful life = 10 years
Now,
Purchasing price = List price - Discount
Purchasing price = $168,000 - [10% × $168,000]
Purchasing price = $168,000 - $16,800
Purchasing price = $151,200
Costs that are directly related to the purchase of asset are capitalized.
Thus,
Cost = Purchasing price + Shipping costs + Sales tax
Cost = $151,200 + $1,000 + $6,500
Cost = $158,700
Now,
Annual straight line depreciation =
Annual straight line depreciation =
Annual straight line depreciation =
Annual straight line depreciation = $11,870