Aroma Company used the net price method of accounting for cash discounts. In one of its transactions on December 26, 2021, the entity sold merchandise with a list price of P5,000,000 to a customer who was given a trade discounts of 20%, 10% and 5%. Credit terms were 4/10, n/30. The goods were shipped FOB destination, freight collect. Total freight charge paid by the customer was P100,000. On December 27, 2021, the customer returned damaged goods originally billed at P500,000.

Aroma Company used the net price method of accounting for cash discounts. In one of its transactions on December 26, 2021, the entity sold merchandise with a list price of P5,000,000 to a customer who was given a trade discounts of 20%, 10% and 5%. Credit terms were 4/10, n/30. The goods were shipped FOB destination, freight collect. Total freight charge paid by the customer was P100,000. On December 27, 2021, the customer returned damaged goods originally billed at P500,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Hello, I would need guidance with A-F, if possible.

A: Manufacturing overhead: It is the indirect cost incurred as a part of manufacturing the products.…

Q: The controller of Ferrence Company estimates the amount of materials handling overhead cost that…

A: Hey, Since there are multiple questions posted, we will answer first question. If you want any…

Q: Big help please

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: Identify the Given and the Unknown or what is being asked in the problem (b)Provide the formula to…

A: Deposits which are made by the depositor into the bank will earn an income on it which is known as…

Q: help me with the last

A: In market leader in the product States something regarding the competitions and make a different…

Q: On July 1, 2020, Pronghorn Co. pays $15,420 to Stellar Insurance Co. for a 3-year insurance policy.…

A: Journal: Recording of a business transactions in a chronological order.

Q: below the letter representing, write the importance of such research in daily life. A. Digital…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Q8: What is the value of a perpetuity of P100 per year if the discount rate is 5% and the cash flows…

A: The perpetuity value = $100 per year Discounting Rate = 5% First Perpetuity receivable: after 2…

Q: Title 1. Complete a search of online resources for grieving individuals. Which ones might you find…

A: This distress website uplifting stories, sonnets, statements and gatherings despondency interaction…

Q: Kyle is a grade 5 student currently taking his modular class at home since the pandemic happened in…

A: The future value of an annuity is the total value of a series of regular, equal cash flows received…

Q: Could you please show me how to solve this with formulas

A: We can determine the amount to be repaid under simple interest (SI) and compound interest (CI) using…

Q: Che-Che bought his brother a laptop 5 years ago which has a cost of around 25,000PhP. The laptop's…

A: Future cost refers to the anticipated expenses or expenditures associated with a particular project,…

Q: How do you find yeild to call?

A: Yield to call is a financial term used to calculate the annual return on a callable bond if it's…

Q: (3) You would like to create a secondary ticket market focused primarily on selling tick- ets for…

A: Note: This post contains several questions. Even Q3 has several sub parts. The first four have been…

Question

100%

Hello good day. Can I seek for a help regarding this one? I need a complete solution please. Thank you

Aroma Company used the net price method of accounting for
cash discounts. In one of its transactions on December 26,
2021, the entity sold merchandise with a list price of
P5,000,000 to a customer who was given a trade discounts of
20%, 10% and 5%. Credit terms were 4/10, n/30.
The goods were shipped FOB destination, freight collect.
Total freight charge paid by the customer was P100,000. On
December 27, 2021, the customer returned damaged goods
originally billed at P500,000.
What amount should be reported as net realizable value of
the accounts receivable on December 31, 2021?
a. 3,420,000
b. 2,920,000
c. 2,703,200
d. 2,803,200

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 - Calculation of Gross Sale Value after Trade Discount :

VIEW

Step 2 - Calculation of Net Realizable Value :

VIEW

Step 3 - Conclusion :

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Money Management and Achieving Financial Goals

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Aroma Company used the net price method of accounting for cash discounts .In one of its transactions on December 26,2021,the entity sold merchandise with a list price of P5,000,000 to a customer who was given a trade discount of 20%,10% and 5%.Credit terms were 4/10n/30. The goods were shipped FOB destination, freight collect. Total freight charge paid by the customer was P100,000.On December 27,2021, the customer returned damaged goods originally billed at P500,000. What is the net realizable value of the accounts receivable on December 31,2021?
FN Trading recorded the following events involving a recent purchase of merchandise: Received goods for P45,000, terms 1/10, n/30. Returned P800 of the shipment for credit. Paid P300 freight on the shipment on terms FOB Destination Point. Paid the invoice within the discount period. How much is the net cost of purchases?
On June 1, 2023, AAA Company sold merchandise with an invoice price of 5,000,000 to a customer. The entity allowed trade discounts of 15%, and 10%. Credit terms were 3/10, n/30 and the sale was made FOB destination. AAA Company paid 100,000 of the delivery cost. a. Compute the total amount of purchases to be included on the buyer’s inventory in the determination of cost of goods available for sale if payment was made beyond the discount period. b. What is the full amount received by AAA company if payment was made on June 11, 2023?
Leni Company regularly buys merchandise from Lmao Company and is allowed trade discounts of 15% and 5% from the list price. On July 16, Leni made a purchase and received an invoice with a list price of P120,000 and terms of 3/10; n/30. Shipping terms is FOB shipping point and freight cost amounted to P2,800. Leni Company uses the net price method of recording its purchases. Assuming that the company paid the account on August 5, what is the cost of the merchandise purchases?
Coronado Industries made a $26000 sale on account with the following terms: 3/10, n/30. If the company uses the net method to record sales made on credit, what is/are the debit(s) in the journal entry to record the sale?
On June 1, 2021, Pitt Company sold merchandise with a list price of P5,000,000 to Burr on account. Pitt allowed trade discounts of 30% and 20%. On June 11, 2021, the customer paid in full. Credit terms were 2/10, n/30 and the sale was made FOB shipping point. Pitt prepaid P200,000 of delivery costs for Burr as an accommodation. 1. What amount should be reported as sales revenue? a. 5,000,000 b. 2,800,000 c. 3,500,000 d. 2,500,000 2. What amount was received by Pitt from Burr as remittance in full? a. 2,744,000 b. 2,940,000 c. 2,944,000 d. 3,140,000
JBL undertook the following transactions for the month of Nov Purchased merchandise or $80,000 less 5-5 on terms 3/10 n/30. The entity paid freight for $2,500 and returned defective goods worth $7,000. JBL paid this account in full within the discount period. How much was the purchase discount?
Presented below are transactions related to Star Company. On June 4, Star Company sold OMR670,000 of merchandise to Ahmed Co., terms 2/10, n/30, FOB shipping point. The cost of the merchandise sold was OMR450,000. On June 9, Ahmed Co. was granted an allowance of OMR30,000 for merchandise purchased on June 4. On June 14, Star Company received the balance due from Ahmed Co. Instructions: Prepare the journal entries to record these transactions on Star Company’ records. using a perpetual inventory system. Assume that Star Company received the balance due from Ahmed Co. on July 2 of the following year instead of June 14. Prepare the journal entry to record the receipt of payment on July 2.
Merchandise invoiced at $8,900 is sold on terms 1/10, n/30. If the buyer pays within the discount period, what amount will be reported on the income statement as net sales?
Please answer the question correctly. Thank you.
Swifty Industries purchased $10,600 of merchandise on February 1, 2025, subject to a trade discount of 10% and with credit terms of 3/15, n/60. It returned $2,600 (gross price before trade or cash discount) on February 4. The invoice was paid on February 13. (a) Assuming that Swifty uses the perpetual method for recording merchandise transactions, record the purchase, return, and payment using the gross method. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Round answers to 2 decimal places, e.g. 6,578.25. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Feb. 1 Feb. 4 Feb. 13 < Account Titles and Explanation Debit Credit
Bramble Industries purchased $9,300 of merchandise on February 1, 2025, subject to a trade discount of 10% and with credit terms of 3/15, n/60. It returned $2,300 (gross price before trade or cash discount) on February 4. The invoice was paid on February 13. (a) Assuming that Bramble uses the perpetual method for recording merchandise transactions, record the purchase, return, and payment using the gross method. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Round answers to 2 decimal places, e.g. 6,578.25. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation Search C SE DELL Debit Credit