**Invoice Settlement Calculation****Problem Statement:**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: $99,000- Freight paid by seller: $1,000- Returns and Allowances: $2,000- Freight terms: FOB shipping point, 2/10, Net 30**Explanation:**1. **Merchandise ($99,000):** This is the initial cost of the goods purchased.2. **Freight paid by seller ($1,000):** The seller has paid $1,000 for the freight, meaning that this cost is included in the settlement amount.3. **Returns and Allowances ($2,000):** This amount is credited due to returns and any allowances.4. **Freight terms (FOB shipping point, 2/10, Net 30):** - FOB shipping point: The buyer takes responsibility for the goods once they are shipped. - 2/10: The buyer gets a 2% discount if the invoice is paid within 10 days. - Net 30: The full invoice amount is due within 30 days if the discount is not taken.To calculate the settlement amount:1. **Calculate Net Purchase Amount:** Subtract Returns and Allowances from the Merchandise cost. Net Purchase Amount = Merchandise - Returns and Allowances Net Purchase Amount = $99,000 - $2,000 Net Purchase Amount = $97,0002. **Calculate Discount:** Apply the 2% discount if paid within the discount period. Discount = 2% of Net Purchase Amount Discount = 0.02 * $97,000 Discount = $1,9403. **Calculate Amount Payable:** Subtract the Discount from the Net Purchase Amount and add the Freight. Amount Payable = Net Purchase Amount - Discount + Freight Amount Payable = $97,000 - $1,940 + $1,000 Amount Payable = $96,060Therefore, **the amount to be paid in full settlement of the invoice is $96,060**.

The amount of full settlement amount of the invoice is the Purchase amount less return &…

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 99000 1000 FOB shipping point. 2/10,Net30 26000 Add your answer

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 99000 1000 FOB shipping point. 2/10,Net30 26000 Add your answer

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

None
Determine the amount to be paid in full settlement of each purchase invoice, assuming that credit for returns and allowances was received prior and that all invoices were paid within the discount period, a. b. Merchandise $3,400 $13,300 3103 Freight Paid by Seller $287 $72 Freight Terms FOB shipping point, 1/10, net 30 FOB destination, 2/10, net 45 Returns and Allowances $300 $2,900 payment
what is the Credit for partial payment knowing that information?
1. Merchandise with a list price of $7,425 is purchased on account, terms FOB shipping point, n/30. The seller prepaid transportation costs of $300. Prior to payment, $1,000 of the merchandise is returned. The correct amount is paid within the discount period.(net method) Record the foregoing transactions of the buyer in the sequence indicated below. a) Purchased the merchandise b) Recorded receipt of the credit memorandum for merchandise returned. c) Paid the amount owed.
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. $21,800 - FOB shipping point, 1/10, n/30 $1,100 b. 12,000 $500 FOB shipping point, 1/10, n/30 1,400 c. 6,500 - FOB destination, 1/10, n/30 600 d. 2,900 100 FOB shipping point, 1/10, n/30 400 e. 3,600 - FOB destination, 1/10, n/30 - a. $fill in the blank 1 b. $fill in the blank 2 c. $fill in the blank 3 d. $fill in the blank 4 e. $fill in the blank 5
Bramble Corporation sells merchandise on account for $4800 to Kingbird Corporation with credit terms of 2/10, n/30. Kingbird returns $800 of merchandise that was damaged, along with a cheque to settle the account within the discount period. What is the amount of the cheque? $4704 $4000 $3920 $4800