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In: Accounting

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

Freight Terms

Determine the amount to be paid in full settlement of each of two invoices, (a) and (b), 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
Freight Terms Returns and
Allowances
a. $36,000 $800 FOB destination, 1/10, n/30 $4,000
b. 44,900 375 FOB shipping point, 2/10, n/30 2,400

Solutions

Expert Solution

Calculate amount paid

a b
Merchandise cost 36000 44900
Less: Return and allowance -4000 -2400
Net purchase 32000 42500
Less: Discount -320 -850
Cost of purchase 31680 41650
Add: Freight paid 375
Amount paid 31680 42025

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