Question

In: Accounting

On April 6, 2018, Home Furnishings purchased $41,000 of merchandise from Una's Imports, terms 3/10 n/45....

On April 6, 2018, Home Furnishings purchased $41,000 of merchandise from Una's Imports, terms 3/10 n/45. On April 8, Home Furnishings returned $8,600 of the merchandise to Una's Imports for credit. Home Furnishings paid cash for the merchandise on April 15, 2018.

Required

  1. What is the amount that Home Furnishings must pay Una's Imports on April 15?

    Net amount due.   
       

  2. Record the events in a horizontal statements model. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank
    HOME FURNISHINGS
    Effect of Events on the Financial Statements
    Events Balance Sheet Income Statement Statement of Cash Flows
    Assets = Liabilities + Stockholders’ Equity Revenue – Expenses = Net Income
    Cash + Merchandise Inventory = Accounts Payable + Common Stock + Retained Earnings
    Purchase inventory + = + + – =
    Return inventory + = + + – =
    Discount percentage + = + + – =
    Paid accounts payable + = + + – =
  3. How much must Home Furnishings pay for the merchandise purchased if the payment is not made until April 20, 2018?
  1. Payment

  2. Record the payment of the merchandise in Requirement (c) in a horizontal statements. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event.

    HOME FURNISHINGS
    Effect of Events on the Financial Statements
    Events Balance Sheet Income Statement Statement of Cash Flows
    Assets = Liabilities + Stockholders’ Equity Revenue – Expenses = Net Income
    Cash + Merchandise Inventory = Accounts Payable + Common Stock + Retained Earnings
    Paid accounts payable + = + + – =

Solutions

Expert Solution

Net Amount Due , if Paid on 15 April will be $31428

b. Horizontal Statement Model- Home Furnishing, if Paid on April-15
Assets = Liabilities Stockholders’ Equity Income Statement Statement of Cash Flows
+ Common Retained Revenue - Expense = Net
S. No. Event Cash + Inventory Account Payable Stock Earnings Income
a. Purchase Inventory $41,000.00 = $41,000.00 +
b. Purchase Return -$8,600.00 -$8,600.00
c. Discount (41000-8600)*3% -$972.00 -$972.00
c. Payment made -$31,428.00 $31,428.00 -24541

Net amount payable if not paid with in 15 April will be $32400

Horizontal Statement Model- Home Furnishing, If not paid on April15
Assets = Liabilities Stockholders’ Equity Income Statement Statement of Cash Flows
+ Common Retained Revenue - Expense = Net
S. No. Event Cash + Inventory Account Payable Stock Earnings Income
a. Purchase Inventory $41,000.00 = $41,000.00 +
b. Purchase Return -$8,600.00 -$8,600.00
c. Payment made -$32,400.00 $32,400.00 -32400

ekkarill92 answered 9 months ago
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