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Question 6.4: Freight Terms Determine the amount to be paid in full settle......

Freight Terms

Determine the amount to be paid in full settlement of each of invoices (a) and (b), 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		 Freight Terms Returns and
Allowances
a.      $4,500 $200 FOB shipping point, 1/10, n/30 $  800
b.      5,000 60 FOB destination, 2/10, n/30 2,500
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a.    $3,863. Purchase of $4,500 less return of $800 less the discount of $37 [($4,500 – $800) × 1%] plus $200 of shipping.

b.    $2,450. Purchase of $5,000 less return of $2,500 less the discount of $50 [($5,000 – $2,500) × 2%].

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