On May 10, 2020, C sold merchandise to D for P130,000 under the terms: less: 5%;...

On May 10, 2020, C sold merchandise to D for P130,000 under the terms: less: 5%; 2/10, n/30 FOB destination freight collect. D paid the freight of P5,000. On April 15, D returned to C defective merchandise worth P10,000 (stated at list). D paid the account within the discount period amounting to P106,230. C notify. D that the amount that they should pay is P106,720. Whose claim do you think is correct C or D? Explain

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Company C and D
C's claim is correct. Please find calculation below.
Calculation as per C	Amount $
Value of merchandise sold	130,000.00
Less: Goods returned	10,000.00
Net Value of merchandise sold	120,000.00
Less: Trade Discount at 5%	6,000.00
Net Value of merchandise sold	114,000.00
Less: Cash Discount at 2%	2,280.00
Amount Receivable	111,720.00
Less: Freight paid	5,000.00
Net amount Receivable	106,720.00

Explanation: Under FOB destination purchases freight cost is borne by seller. If it is paid by the buyer then it will be deducted from the net amount due. So D's calculation is incorrect.

ekkarill92 answered 1 year ago

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