On December 1, 2021 Cardinal Company, a garden retailer, purchased $20,000 of corn seed, terms 2/10, n/30, from Iowa Farm Co. Even though the discount period had expired, Rosa Lopez subtracted the discount of $400 when she processed the documents for payment on December 15, 2021. Discuss whether Rosa Lopez behaved in a professional manner by subtracting the discount, even though the discount period had expired.
On December 1, 2021 Cardinal Company, a garden retailer, purchased $20,000 of corn seed, terms 2/10, n/30, from Iowa Farm Co. Even though the discount period had expired, Rosa Lopez subtracted the discount of $400 when she processed the documents for payment on December 15, 2021. Discuss whether Rosa Lopez behaved in a professional manner by subtracting the discount, even though the discount period had expired.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
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Problem 19E: Rix Company sells home appliances and provides installation and service for its customers. On April...
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On December 1, 2021 Cardinal Company, a garden retailer, purchased $20,000 of corn seed, terms 2/10, n/30, from Iowa
Farm Co. Even though the discount period had expired, Rosa Lopez subtracted the discount of $400 when she processed
the documents for payment on December 15, 2021.
Farm Co. Even though the discount period had expired, Rosa Lopez subtracted the discount of $400 when she processed
the documents for payment on December 15, 2021.
Discuss whether Rosa Lopez behaved in a professional manner by subtracting the discount, even though the discount period had expired.
Expert Solution
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Solution
In the given case ,C company has a chance to get 2 % discount if payment made with in 10 days i.e 20000*2% =400 and if not than pay the full amount with in 30 days.
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