 # For the following purchases of merchandise, determine the amount of cash to be paid. ### College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
Publisher: South-Western College Pub
ISBN: 9781337280570 ### College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
Publisher: South-Western College Pub
ISBN: 9781337280570

#### Solutions

Chapter
Section
Chapter 10, Problem 1E
Textbook Problem

## For the following purchases of merchandise, determine the amount of cash to be paid. Expert Solution
To determine

Calculate the amount of cash to be paid for purchase of merchandise.

### Explanation of Solution

a. Calculate the payment of cash for purchase of merchandise.

The purchase of merchandise is $550 because cash is not paid within the discount period. b. Calculate the payment of cash for purchase of merchandise. Calculate the net purchase. Net Purchase=(Amount of purchasePurchase returns and allowances)=$700$100=$600

Calculate the purchase discount.

Purchase Discount=(Net purchase ×Trade discount)=$600×1%=$6

Calculate the purchase payment.

Purchase Payment =(Net purchasePurchase discount)=$600$6=$594 c. Calculate the payment of cash for purchase of merchandise. Calculate the total invoice amount. Total Invoice Amount=(Amount purchase+Freight charges)=$940+$60=$1,000

Calculate the Purchase Discount

Purchase Discount =(Amount purchase ×Trade discount)=$940×2%=$18.80

Calculate the Purchase payment.

Purchase Payment=(Amount of purchase Purchase Discount)=\$1,00018

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