On March 6, 2006, Lies Imports purchased merchandise from The Glass Exchange with a list price of

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On March 6, 2006, Lie’s Imports purchased merchandise from The Glass Exchange with a list price of \($15,500\), terms 2/10, n/45. On March 10, Lie’s returned merchandise to The Glass Exchange for credit. The list price of the returned merchandise was \($3,200\). Lie’s paid cash to settle the accounts payable on March 15, 2006.

Required:

a. What is the amount of the check that Lie’s must write to The Glass Exchange on March 15?

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

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c. How much would Lie’s pay for the merchandise purchased if the payment is not made until March 20,2006?

d. Record the payment of the merchandise in Event c in a horizontal statements model like the one shown above.

e. Why would The Glass Exchange sell merchandise with the terms 2/10, n/45?

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Survey Of Accounting

ISBN: 9780077503956

1st Edition

Authors: Thomas Edmonds, Philip Olds, Frances McNair, Bor-Yi Tsay

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