Answer to Question #220648 in Accounting for zuby

Question

Exercise F Raiser Company purchased goods at a gross selling price of USD 2,400 on August 1. Discount terms

of 2/10, n/30 were available. For each of the following independent situations, determine (1) the cash discount

available on the final payment and (2) the amount paid if payment is made within the discount period.

Purchase

Transportation Freight Allowance

Terms Paid (by) Granted

a. FOB shipping point $240 (buyer) $480

b. FOB destination 120 (seller) 240

c. FOB shipping point 180 (seller) 720

d. FOB destination 192 (buyer) 120

Answer 1

1) If the amount is paid within 10 days then the amount of cash discount = $2,400× 2% = $48

2) The amount to be paid if the payment is made within the discount period = $2,400 $-$ $48 =$ 2,352