May 4, Bargain Wholesalers sells inventory to Pet World Supplies for $8,250.00 with terms 1/10, n/30. The cost of the merchandise is $5,755.00. May 7, Bargain Wholesalers sells an additional $10,985.00 in inventory to Pet World Supplies with terms 1/10, n/30. The cost of the merchandise is $6,925.00. May 13, Bargain Wholesalers receives a check from Pet World Supplies paying the balance due on both invoices.

May 4, Bargain Wholesalers sells inventory to Pet World Supplies for $8,250.00 with terms 1/10, n/30. The cost of the merchandise is $5,755.00. May 7, Bargain Wholesalers sells an additional $10,985.00 in inventory to Pet World Supplies with terms 1/10, n/30. The cost of the merchandise is $6,925.00. May 13, Bargain Wholesalers receives a check from Pet World Supplies paying the balance due on both invoices.

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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On November 5, of the current year, Ligaya Merchandising Enterprise purchased merchandise with the list price of P120,000. The merchandise is subject to a treade discount of 15%, 10%, 5% with credit terms of 3/10, n/30. (Ligaya Merchandising Enterprise is a non-VAT registered business) 1. How much is the invoice price? 2. At what amount should Ligaya Merchandising Enterprise debit Purchases? 3. How much is the trade discount? 4. How much is the cash discount? 5. Up to what date is the discount period? 6. If Ligaya Merchandising make payment on November 15, how much should it pay in full settlement of its account? 7. If payment is made on November 20, how much should Ligaya pay in full settlement of its November 5, account?
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Domestic
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