1. The Buyer and Seller agreed on the term FOB Shipping Point, Freight Collect for the freight cost of $12,500 for the sales transactions of $325,000 on June 22, 2019. The Buyer paid in full on July 2 for the credit term 1/10, n/15. 2. The Seller sold merchandise on March 26, 2019 with the list price of $500,000 at trade discount of 10%, 5%. The terms of shipment is FOB - Shipping Point, Freight Prepaid with the freight amounting to $15,000. The Buyer's credit term is 3/EOM, n/60. The Buyer paid all the accounts on March 31, 2019. 3. On January 28, 2019 the Buyer purchased $450,000 worth of inventory at 10% trade discount with a term of 2/10, n/30. The freight cost is P25,000 on FOB- Shipping Point, Freight Collect. The Seller collected in full what is due from the Buyer on February 08, 2019. 4. The term of shipment on the sale of goods on September 28, 2019 for $1,500,000 is FOB Destination, Freight Collect with freight cost of $225,000. The Seller gave a trade discount of 15%, 5% with a credit term of 3/10, l/15, n/30. The Seller collected on October 10, 2019.
1. The Buyer and Seller agreed on the term FOB Shipping Point, Freight Collect for the freight cost of $12,500 for the sales transactions of $325,000 on June 22, 2019. The Buyer paid in full on July 2 for the credit term 1/10, n/15. 2. The Seller sold merchandise on March 26, 2019 with the list price of $500,000 at trade discount of 10%, 5%. The terms of shipment is FOB - Shipping Point, Freight Prepaid with the freight amounting to $15,000. The Buyer's credit term is 3/EOM, n/60. The Buyer paid all the accounts on March 31, 2019. 3. On January 28, 2019 the Buyer purchased $450,000 worth of inventory at 10% trade discount with a term of 2/10, n/30. The freight cost is P25,000 on FOB- Shipping Point, Freight Collect. The Seller collected in full what is due from the Buyer on February 08, 2019. 4. The term of shipment on the sale of goods on September 28, 2019 for $1,500,000 is FOB Destination, Freight Collect with freight cost of $225,000. The Seller gave a trade discount of 15%, 5% with a credit term of 3/10, l/15, n/30. The Seller collected on October 10, 2019.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:5. On September 29, 2019, the Buyer bought $300,000 of inventory at 5% trade discount with
the shipping term of FOB - Destination, Freight Prepaid. The shipping cost is $45,000.
The Seller gave a credit term of 2/15, n/45. The Buyer paid in full on October 13, 2019.
Prepare the journal entries on the Buyer and Seller books for the following:
a. Purchase and sales transactions.
b. Freight transactions.
c. Payment of the transactions.
Transcribed Image Text:Treat the following Financial Transactions as independent scenarios:
1. The Buyer and Seller agreed on the term FOB Shipping Point, Freight Collect for the
freight cost of $12,500 for the sales transactions of $325,000 on June 22, 2019. The Buyer
paid in full on July 2 for the credit term 1/10, n/15.
2. The Seller sold merchandise on March 26, 2019 with the list price of $500,000 at trade
discount of 10%, 5%. The terms of shipment is FOB – Shipping Point, Freight Prepaid
with the freight amounting to S15,000. The Buyer's credit term is 3/EOM, n/60. The Buyer
paid all the accounts on March 31, 2019.
3. On January 28, 2019 the Buyer purchased $450,000 worth of inventory at 10% trade
discount with a term of 2/10, n/30. The freight cost is P25,000 on FOB - Shipping Point,
Freight Collect. The Seller collected in full what is due from the Buyer on February 08,
2019.
4. The term of shipment on the sale of goods on September 28, 2019 for $1,500,000 is FOB
Destination, Freight Collect with freight cost of $225,000. The Seller gave a trade discount
of 15%, 5% with a credit term of 3/10, 1/15, n/30. The Seller collected on October 10,
2019.
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