On April 6, 2013, Fashion Furnishings purchased $24,800 of merchandise from James Imports, terms 2y10 ny45. On

On April 6, 2013, Fashion Furnishings purchased $24,800 of merchandise from James’ Imports, terms 2y10 ny45. On April 8, Fashion returned $2,400 of the merchandise to James’ Imports for credit. Fashion paid cash for the merchandise on April 15, 2013.

Required

a. What is the amount that Fashion must pay James’ Imports on April 15?

b. Record the events in a horizontal statements model like the following one.

c. How much must Fashion pay for the merchandise purchased if the payment is not made until April 20, 2013?
d. Record the payment in Requirement c in a horizontal statements model like the one above.
e. Why would Fashion want to pay for the merchandise by April15?

Transcribed Image Text:

Assets = Liab. + Equity Rev.-Exp.= Net Inc. Cash Flow Cash+ Inv. Accts. Pay. C.Stock. +Ret. Earn.