# Question

Rondo’s Sports Wear made the following purchases in June of the current year:

June 7 Purchased $5,000 of merchandise, terms 5/15, n/60, FOB shipping point

June 15 Purchased $2,500 of merchandise, terms 3/10, n/30, FOB shipping point

June 25 Purchased $7,500 of merchandise, terms 2/10, n/30, FOB destination

Requirements

1. For each of the purchases listed, how many days does the company have to take advantage of the purchase discount?

2. What is the amount of the cash discount allowed in each case?

3. Assume the freight charges are 10% of the gross sales price. What is the amount of freight that Rondo’s must pay for each purchase?

4. What is the total cost of inventory for Rondo’s for the month of June, assuming that all discounts were taken?

June 7 Purchased $5,000 of merchandise, terms 5/15, n/60, FOB shipping point

June 15 Purchased $2,500 of merchandise, terms 3/10, n/30, FOB shipping point

June 25 Purchased $7,500 of merchandise, terms 2/10, n/30, FOB destination

Requirements

1. For each of the purchases listed, how many days does the company have to take advantage of the purchase discount?

2. What is the amount of the cash discount allowed in each case?

3. Assume the freight charges are 10% of the gross sales price. What is the amount of freight that Rondo’s must pay for each purchase?

4. What is the total cost of inventory for Rondo’s for the month of June, assuming that all discounts were taken?

## Answer to relevant Questions

Carrie & Runnels Bikes Plus, Inc., made the following purchases in December of the current year:December 5 Purchased $2,600 of merchandise, terms 3/10, n/30, FOB destinationDecember 14 Purchased $6,150 of merchandise, terms ...The following series of transactions occurred during 2009:January 1 Beginning inventory was 70 units at $10 eachJanuary 15 Purchased 100 units at $11 eachFebruary 4 Sold 60 units at $20 eachMarch 10 Purchased 50 units at $12 ...At the beginning of April, Morgan Parts Company, Inc., started with a contribution of $20,000 cash in exchange for common stock from its shareholders. The company engaged in the following transactions during the month of ...The following information is from the financial statements of Toys for Toddlers Company:Requirements1. Calculate the gross profit ratio for the last two years shown.2. Calculate the inventory turnover ratio for the last two ...How would each of the following inventory errors affect net income for the year?Assume each is the only error during the year.1. Ending inventory is overstated by $1,000.2. Ending inventory is understated by $2,500.3. ...Post your question

0