Details of a purchase invoice and related credit memo are summarized as follows: Invoice: Cost
Question:
Details of a purchase invoice and related credit memo are summarized as follows:
Invoice: | Cost of merchandise listed on purchase invoice | $6,500 |
| Prepaid freight charge added to invoice | 150 |
| Terms, FOB shipping point, 1/10, n/eom |
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| Credit memo: Cost of merchandise returned | $1,500 |
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Assume that the credit memo was received prior to payment and that the invoice is paid within the discount period. Determine the following:
(a) | Amount of the cash discount allowed. |
(b) | Amount to be paid by the purchaser if the discount is taken. |
(c) | Cost of the merchandise to the purchaser if the discount is NOT taken. |
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210.Conquest Company uses a perpetual inventory system. Conquest purchased $1,500 of merchandise on account and payment was made within the discount period. The credit terms were 2/10,n/30. Journalize Conquests purchase and payment.
212.Details of invoices for purchases of merchandise are as follows:
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| Returns and |
| Merchandise | Freight | Terms | Allowances |
(a) | $800 | $45 | FOB shipping point, 1/10, n/30 | $200 |
(b) | 4,600 | --- | FOB destination, n/30 | 800 |
(c) | 2,400 | 55 | FOB shipping point, 2/10, n/30 | 600 |
(d) | 7,500 | --- | FOB destination, 1/10, n/30 |
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Determine the amount to be paid in full settlement of each of the invoices, assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period.
213.Journalize the entries to record the following selected transactions:
(a) | Sold $900 of merchandise on account, subject to 7% sales tax. The cost of the merchandise sold was $510. |
(b) | Paid $436 to the state sales tax department for taxes collected. |
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College Accounting
ISBN: 978-1111528126
11th edition
Authors: Tracie Nobles, Cathy Scott, Douglas McQuaig, Patricia Bille