**Exercise: Invoice Settlement Calculation**Determine the amount to be paid in full settlement of the invoice assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period.**Invoice Details:**- **Merchandise:** \$112,000- **Freight paid by seller:** \$4,000- **Freight terms:** FOB destination- **Returns and Allowances:** \$24,000- **Discount:** 1/10, Net 30**Instructions:**1. Calculate the total amount of merchandise purchased.2. Subtract the amount for returns and allowances.3. Apply the discount if the payment is made within the specified discount period.4. Add any freight charges to be paid by the buyer if specified.**Add your answer in the space provided.*****Explanation:***- **FOB Destination:** The seller pays the freight charges, and the buyer takes ownership when the goods reach their destination.- **1/10, Net 30:** This means if the buyer pays within 10 days, they get a 1% discount. Otherwise, the full amount is due in 30 days.**Example calculation (to be replaced with actual calculation by the student):**- Merchandise: \$112,000- Returns and Allowances: \$24,000- Discounted Amount: 1% of remaining amount if paid within the discount periodLet's say the remaining amount after returns and allowances is \$88,000:- Discount: 1% of \$88,000 = \$880- Amount to be paid: \$88,000 - \$880 = \$87,120Provide your detailed answer below.

FOB destination sale: In FOB destination sale freight costs are paid by the seller and ownership is…

Determine the amount to be paid in full settlement of the invoice 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 112000 4000 FOB destination, 1/10.Net30 24000

Determine the amount to be paid in full settlement of the invoice 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 112000 4000 FOB destination, 1/10.Net30 24000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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