Question
Asked Dec 9, 2019
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Determine the amount to be paid in full settlement of each of two invoices, (a) and (b),
assuming that credit for returns and allowances was received prior to payment and that
all invoices were paid within the discount period.
Freight
Paid by Seller
Returns and
Allowances
Merchandise
Freight Terms
$36,000
$800
FOB destination, 1/10, n/30
$4,000
a.
b.
FOB shipping point, 2/10, n/30
44,900
375
2,400
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Determine the amount to be paid in full settlement of each of two invoices, (a) and (b), assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period. Freight Paid by Seller Returns and Allowances Merchandise Freight Terms $36,000 $800 FOB destination, 1/10, n/30 $4,000 a. b. FOB shipping point, 2/10, n/30 44,900 375 2,400

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Expert Answer

Step 1

FOB (Free on Board) Destination means that the buyer pays all costs incurred for the delivery of goods once the goods is delivered at buyer receiving point. The transportation costs from the point of origin to the point of destination is beard by the seller.

Step 2

(a)

Calculate the amount to be paid in full settlement un...

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Net merchandi se purchased on account - Discount Amount to be paid in full settlement (Merchandise purchased on account - Purchase returns (Net merchandise purchased on account x1% =[(S36,000-S4,000)-(S32,000×1%)1 =(S32,000-S320) =S31, 680

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