The debits and credits from four related transactions, (1) through (4), are presented in the following T accounts. Assume that the freight terms were FOB shipping point and that the credit terms were 1/10, n/30. Cash (2) (4) Inventory (3) 13,860 150 150 11,880 (1) (2) a. Describe each transaction. 1. Purchased merchandise on account net of discount. 2. Paid freight. 3. An allowance for return of merchandise was granted by the creditor. 4. Pald the balance due within the discount period. ✓ (3) (4) 1,980 b. Determine the invoice amount of the merchandise that was returned in (3). 1,960.2 X Accounts Payable 1,980 (1) 11,880 13,860
The debits and credits from four related transactions, (1) through (4), are presented in the following T accounts. Assume that the freight terms were FOB shipping point and that the credit terms were 1/10, n/30. Cash (2) (4) Inventory (3) 13,860 150 150 11,880 (1) (2) a. Describe each transaction. 1. Purchased merchandise on account net of discount. 2. Paid freight. 3. An allowance for return of merchandise was granted by the creditor. 4. Pald the balance due within the discount period. ✓ (3) (4) 1,980 b. Determine the invoice amount of the merchandise that was returned in (3). 1,960.2 X Accounts Payable 1,980 (1) 11,880 13,860
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Purchase-Related Transactions
The debits and credits from four related transactions, (1) through (4), are presented in the following T accounts. Assume that the freight terms were FOB
shipping point and that the credit terms were 1/10, n/30.
(1)
(2)
a. Describe each transaction.
3.
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Check My Work
Cash
(2)
(4)
Inventory
(3)
Check My Work
13,860
150
Purchased merchandise on account net of discount.
2. Paid freight.
3809
An allowance for return of merchandise was granted by the creditor.
4. Paid the balance due within the discount period.
✓
b. Determine the invoice amount of the merchandise that was returned in (3).
S 1,960.2 X
11,880
150
1
1₁
1,980
(3)
(4)
(
Accounts Payable
1,980 (1)
11,880
13,860
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