Question

Determining Amounts to be Paid on Invoices

Determine the amount to be paid in full settlement of each of the following invoices, assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period:

	Merchandise		Freight Paid by Seller				Customer Returns and Allowances
a.	$18,900		-			FOB destination, n/30	$900
b.	11,200		$400			FOB shipping point, 1/10, n/30	1,300
c.	6,700		-			FOB shipping point, 2/10, n/30	600
d.	3,900		200			FOB shipping point, 2/10, n/30	500
e.	1,800		-			FOB destination, 1/10, n/30	-

a. $

b. $

c. $

d. $

e. $

Answer 1

Solution:-

a.) $18,000

b.) $10,201

c.) $5,978

d.) $3,532

e.) $1,782

Explanation: -

Amount paid in full settlement = Merchandise - Customer Returns

and Allowances - Discount received + Freight Paid by Seller

Question number	a	b	c	d	e
Merchandise	$18,900	$11,200	$6,700	$3,900	$1,800
LESS Customer Returns and Allowances	$900	$1,300	$600	$500	-
LESS Discount received	-	$99 (11200- 1300 × 1%)	$122 (6700 -600 × 2%)	$68 (3900-500 × 2%)	$18 (1800 × 1%)
ADD Freight Paid by Seller	-	$400	-	$200	-
Amount paid in full settlement	$18,000	$10,201	$5,978	$3,532	$1,782