Freight Terms Determine the amount to be paid in full settlement of each of two

Question

Freight Terms Determine the amount to be paid in full settlement of each of two invoices, (a) and (b), assuming that credt for returns and allowances was received prior to payment and that all involces were paid within the discount period. II required, round the answers to the nearest dollar Freight Paid by Seller Returns and Freight Terms Allowances a. $8,200 b. $400 FOB destination, 2/10, nso $1,1s0 800 3,900 100 FOB shipping point, 1/10, n/30 b. S Instructions Shore Co. sold mea andise to Blue Star Co. on a count,34,650, terms FOB shipping pont, 2/15. n 30. The t the d sold s$ 17,900. Snore paid 1 eight 0138 50 Jour alae the e tres tor store and 8A e Star yar te e sei , pu eee, a d pemerlof aon unt due. Refer to Me appo nate cont ery s Charto, Accocitstof exact wo dio of account Dtes CHART OF ACCOUNTS Shore Co General Ledger Chart of Accounts-Shore Co. ASSETS REVENUE 110 Cash 121 Accounts Recaivable-Blue tarC. 125 Notes Receivable 130 Invortory 140 Office Supplies 141 Store Suppliss 142 Propaid hsurance 180 Land 192 Sore Equipmem 410 Sales 010 Rent Revenue EXPENSES 501 Cost ot Goods Sold 521 DelMery Expense 522 Advgrtising Expense 524 Doprociation Expense-Store Equipment 525 Depreciation Expense-Offioe Equipment re Equipment 31 Rert Expense t omce Equipmert 533 Insurance Expense 95 Accumulated Depredation-omce Equipmert 534 Stong Supplios Expenna Instructions Hahn Floodng Company uses a system A Sales retums or 97,500 and merchandse retums $44,150 are etimeted or the current years saes. B The mentory account hes e balance of R 52.350 while hoca iman m dicates tet41%0 of me hand ses on hand he Chertof Accouors for exsct wordong of scoouoR

Explanation / Answer

Q1. Req a: Amount paid in full settlement: Invoice amount of Merchandise 8200 Less: Returns and allowance 1150 Net Amount due on invoice 7050 Less: Sales discount 141 (7050*2%) Amount paid in full settlement: 6909 Note: Friehgt is not due to be paid as terms in FOB destination. Req b: Amount paid in full settlement: Invoice amount of Merchandise 3900 Less: Returns and allowance 800 Net Amount due on invoice 3100 Less: Sales discount 31 (3100*1%) Net Invoice amount 3069 Add: Freight paid by seller 100 Amount paid in full settlement: 3169

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