Question

Sales-Related Transactions

Merchandise is sold on account to a customer for $8,000, terms FOB shipping point, 1/10, n/30. The seller paid the freight of $300.

a. Determine the amount of the sale.
$?

b. Determine the increase to Accounts Receivable.
$? (the answer of this problem is not 8,300 or 7,700)

c. Determine the amount of the discount for early payment.
$?

d. Determine the amount due within the discount period.

$? (the answer of this problem is not 8,300 or 7,700)

Answer 1

A)Amount of sale =The price at which goods are sold to customers = $ 8000

b)Increase in accounts receivable = sale amount 8000 +300 Freight paid by seller on behalf of buyer

                                = $ 8300

c) amount of the discount for early payment = Amount of sales revenue * discount %

                            = 8000* 1%

                            = $ 80

d)Amount due within discount period = Accounts receivable - amount of discount

                                  = 8300-80

                                     = $ 8220