Chapter 12, Problem 3EB

Pianos Unlimited sells pianos to customers. The company contracts with a supplier who provides it with replacement piano keys. There is an agreement that Pianos Unlimited is not required to provide cash payment immediately, and instead will provide payment within thirty days of the invoice date.

Additional information:

• Pianos Unlimited purchases 400 piano keys for $7 each on September 1, invoice date September 1, with discount terms 2/10, n/30.

• Pianos Unlimited returns 150 piano keys (receiving a credit amount for the total purchase price per key of $7 each) on September 8.

• The company purchases an additional 230 keys for $5 each on September 15, invoice date September 15, with no discount terms.

• The company pays 50% of the total amount due to the supplier on September 24.

What amount does Pianos Unlimited still owe to the supplier on September 30? What account is used to recognize this outstanding amount?