Full-Time Materials sold K15,000 worth of merchandise on account to Distance Hardware
on terms of 3/10, n/45, FOB shipping point Full-Time Materials prepaid shipping charges
of K220 and included this amount in the invoice total. These goods had a cost to Full-Time
Materials of K7,500.
4 When Distance Hardware checked the items received from the purchase of June l, they
realized that they had received too many electrical inserts. They returned KK3,500 of the
merchandise to Full-Time Materials. Full-Time Materials restocked this inventory, which
had an original cost of K1,875.
10 Distance Hardware paid the amount owed to Full-Time Materials for the June 1 purchase,
less the return and the discount.
25 Distance Hardware sold K3,200 worth of merchandise to Sarah Craft for cash. This
merchandise had a cost to Distance Hardware of K1,700.
Requirements
1. What kinds of discounts exist in a merchandizing business and what purpose do they
serve in a business?
2. Journalize these transactions for Distance Hardware.

Answer rating: 100% (QA)

Date Account Title 1 Merchandise Inventory Accounts Payable FullTim... View the full answer