Question

Determine the amount to be paid in full settlement of each invoice, assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period. Merchandise Freight Paid by Seller Freight Terms Returns and Allowances (a) $4,500 $140 FOB shipping point, 2/10, net 30 $1,200 (b) $7,650 $200 FOB destination, 1/10, net 45 $450 a. $ b. $

Answer 1

Answer:

A. $ 3,094

B. $ 7, 128

Step-by-step explanation:

Nominal 4,500 - 1,200 = 3,300 net

Next, we calcualte the discount: 3,300 x 0.02 = 66

after the discount, we have:

3,000 - 66 = 2,954

Because we are dealing with FOB freight, we have:

2,954 + 140 = 3,094

7,650 - 450 = 7,200 x 1% discount = 72

net 7,200 - 72 = 7,128

As the term are FOB destination, the seller is in charge of the freight.