**Freight Terms Explanation**This task involves calculating the final settlement amount for two invoices, given certain freight terms and assuming that returns and allowances were credited prior to payment. Each transaction also assumes the invoices are paid within the discount period.### Details of the Invoices1. **Invoice (a)** - **Merchandise Cost:** $35,600 - **Freight Paid by Seller:** $1,300 - **Freight Terms:** FOB destination, 1/10, n/30 - **Credit for Returns and Allowances:** $6,5002. **Invoice (b)** - **Merchandise Cost:** $73,100 - **Freight Paid by Seller:** $600 - **Freight Terms:** FOB shipping point, 2/10, n/30 - **Credit for Returns and Allowances:** $3,900### Freight Terms Explained- **FOB Destination:** The seller pays for transportation and owns the goods until they reach the buyer's location.- **FOB Shipping Point:** The buyer pays for transportation and owns the goods once they leave the seller's location.- **Discount Terms (e.g., 1/10, n/30):** A 1% discount is available if the invoice is paid within 10 days, otherwise, the net amount is due in 30 days.### Calculation NotesTo determine the settlement amount for each invoice:- Deduct the returns and allowances from the merchandise cost.- Apply any available discounts.- Consider the impact of freight costs based on the specified terms.For assistance with these calculations, refer to relevant accounting principles related to freight and payment terms.

Merchandise means the amount of inventory or goods that are held by an entity for the purpose of…

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. a. b. a. b. Merchandise $58,600 73,100 Freight Paid by Seller $1,300 600 Freight Terms FOB destination, 1/10, n/30 FOB shipping point, 2/10, n/30 Credit for Refunds and Allowances $6,500 3,900

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. a. b. a. b. Merchandise $58,600 73,100 Freight Paid by Seller $1,300 600 Freight Terms FOB destination, 1/10, n/30 FOB shipping point, 2/10, n/30 Credit for Refunds and Allowances $6,500 3,900

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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