Larson Company shipped goods on March 10th (FOB shipping point) for $25,400. The terms of payment are 2/15 net 45. The order arrived on March 13th. On March 15th, the customer returned $1,800 worth of damaged goods. On March 18th, Larson granted a $2,200 credit for items that were incorrect but kept by the customer. On March 24th, the customer paid Larson. What is the balance in the AR account on March 16th? a. $23,600 b. $25,400 c. $21,400 d. $27,200

Larson Company shipped goods on March 10th (FOB shipping point) for $25,400. The terms of payment are 2/15 net 45. The order arrived on March 13th. On March 15th, the customer returned $1,800 worth of damaged goods. On March 18th, Larson granted a $2,200 credit for items that were incorrect but kept by the customer. On March 24th, the customer paid Larson. What is the balance in the AR account on March 16th? a. $23,600 b. $25,400 c. $21,400 d. $27,200

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 1PB: Record journal entries for the following transactions of Furniture Warehouse. A. July 5: Purchased...

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Record journal entries for the following transactions of Furniture Warehouse. A. July 5: Purchased 30 couches at a cost of $150 each from a manufacturer. Credit terms are 2/15, n/30, invoice date July 5. B. July 10: Furniture Warehouse returned 5 couches for a full refund. C. July 15: Furniture Warehouse found 6 defective couches, but kept the merchandise for an allowance of $500. D. July 20: Furniture Warehouse paid their account in full with cash.
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Air Compressors Inc. purchases compressor parts for its inventory from a supplier. The following transactions take place during the current year: A. On April 5, the company purchases 400 parts for $8.30 per part, on credit. Terms of the purchase are 4/ 10, n/30, invoice dated April 5. B. On May 5, Air Compressors does not pay the amount due and renegotiates with the supplier. The supplier agrees to $400 cash immediately as partial payment on note payable due, converting the debt owed into a short-term note, with a 7% annual interest rate, payable in three months from May 5. C. On August 5, Air Compressors pays its account in full. Record the journal entries to recognize the initial purchase, the conversion plus cash, and the payment.
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