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Similar to Financial and Managerial Accounting 11 edition E5-20

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Accounting

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Homework

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Homework Assignment 5
Chapter 6
Determine the amount to be paid in full settlement of each of the following invoices,
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 Returns and
Allowances
a. $10,000 FOB destination, n/20 $850
b. 9,500 $350 FOB shipping point, 3/10, n/30 1,000
c. 8,950 FOB shipping point, 1/10, n/30 600
d. 13,000 $125 FOB shipping point, 2/10, n/30 250
e. 5,150 FOB destination, 2/10, n/30 100
a.
$10,000 (Merchandise Sales)
- 850 (Returns and Allowances)
$9,150 (amount to be paid in full settlement)
b.
$9,500 (Merchandise Sales)
- 1,000 (Returns and Allowances)
- 255 (Sales Discount: (9,500-1,000) x 3%)
+ 350 (Freight Shipping)
$8,595 (amount to be paid in full settlement)
c.
$8,950 (Merchandise Sales)
- 600 (Returns and Allowances)
- 83.5 (Sales Discount: (8,950-600) x 1%)
$8,266.5 (amount to be paid in full settlement)
d.
$13,000 (Merchandise Sales)
- 250 (Returns and Allowances)
- 255 (Sales Discount: (13,000-250) x 2%)
+ 125 (Freight Shipping)
$12,620 (amount to be paid in full settlement)

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e.
$5,150 (Merchandise Sales)
- 100 (Returns and Allowances)
- 101 (Sales Discount: (5,150-100) x 2%)
$4,949 (amount to be paid in full settlement)

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