Question

Determining Amounts to be Paid on Invoices 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. $21,700 - FOB destination, n/30 $1,100 b. 11,100 $400 FOB shipping point, 1/10, n/30 1,300 c. 8,300 - FOB shipping point, 2/10, n/30 700 d. 2,600 100 FOB shipping point, 2/10, n/30 400 e. 1,900 - FOB destination, 2/10, n/30 - a. $ b. $ c. $ d. $ e. $

Determining Amounts to be Paid on Invoices

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.	$21,700		-			FOB destination, n/30	$1,100
b.	11,100		$400			FOB shipping point, 1/10, n/30	1,300
c.	8,300		-			FOB shipping point, 2/10, n/30	700
d.	2,600		100			FOB shipping point, 2/10, n/30	400
e.	1,900		-			FOB destination, 2/10, n/30	-

a. $

b. $

c. $

d. $

e. $

Answer 1

Calculation of Settlement Prices:

a.)

Merchandise Price	$21700
Less: Returns and Allowances	$(1100)
TOTAL	$20600

b.)

1/10 ,n30 means 1% discount will be alowed if the payment is made within 10 days. Assuming the payment being made in 10days and the calculation is as follows:

Merchandise Price	$11100
Add: Freight Paid by seller to be borne by buyer since FOB shipping	$400
Less: Returns and Allowances	$(1300)
Less: Discount allowed(1% of $(11100-1300))	$(98)
TOTAL	$10102

c.)

Merchandise Price	$8300
Less: Returns and Allowances	$(700)
Less: Discount allowed(2% of $(8300-700))	$(152)
TOTAL	$7448

d.)

Merchandise Price	$2600
Add: Freight Paid by seller to be borne by buyer since FOB shipping	$100
Less: Returns and Allowances	$(400)
Less: Discount allowed(2% of $(2600-400))	$(44)
TOTAL	$2256

e.)

Merchandise Price	$1900
Less: Discount allowed(2% of $1900)	$(38)
TOTAL	$1862