On March 6, 2010, Ed's Imports purchased merchandise from Watches Inc. with a list price of $31,000,

Question:

On March 6, 2010, Ed's Imports purchased merchandise from Watches Inc. with a list price of $31,000, terms 2/10, n/45. On March 10, Ed's returned merchandise to Watches Inc. for credit. The list price of the returned merchandise was $6,400. Ed's paid cash to settle the accounts payable on March 15, 2010.

Required

a. What is the amount of the check that Ed's must write to Watches Inc. on March 15?

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

c. How much would Ed's pay for the merchandise purchased if the payment is not made until March 20, 2010?
d. Record the payment of the merchandise in Event c in a horizontal statements model like the one shown above.
e. Why would Watches Inc. sell merchandise with the terms 2/10,n/45?

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...