Aroma Company used the net price method of accounting for cash discounts. In one of its transactions on December 26, 2021, the entity sold merchandise with a list price of P5,000,000 to a customer who was given a trade discounts of 20%, 10% and 5%. Credit terms were 4/10, n/30. The goods were shipped FOB destination, freight collect. Total freight charge paid by the customer was P100,000. On December 27, 2021, the customer returned damaged goods originally billed at P500,000.

Aroma Company used the net price method of accounting for cash discounts. In one of its transactions on December 26, 2021, the entity sold merchandise with a list price of P5,000,000 to a customer who was given a trade discounts of 20%, 10% and 5%. Credit terms were 4/10, n/30. The goods were shipped FOB destination, freight collect. Total freight charge paid by the customer was P100,000. On December 27, 2021, the customer returned damaged goods originally billed at P500,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Aroma Company used the net price method of accounting for cash discounts .In one of its transactions on December 26,2021,the entity sold merchandise with a list price of P5,000,000 to a customer who was given a trade discount of 20%,10% and 5%.Credit terms were 4/10n/30. The goods were shipped FOB destination, freight collect. Total freight charge paid by the customer was P100,000.On December 27,2021, the customer returned damaged goods originally billed at P500,000. What is the net realizable value of the accounts receivable on December 31,2021?
1. FDN Trading recorded the following events involving a recent purchase of merchandise: Received goods for P35,000, terms 2/10, n/30. Returned P900 of the shipment for credit. Paid P400 freight on the shipment on terms FOB Destination Point. Paid the invoice within the discount period. How much is the net cost of purchases? 2. On November 1, 2021, FDN Trading sold merchandise to ABC Trading worth P43,000 with credit term of 1/10, n/30 under freight term FOB Destination. The cost of the freight of P1,200 was paid by FDN. On November 3, ABC Trading returned some defective merchandise worth P4,300 and on the following day, made a partial payment of P14,000. How much is the final amount collected by FDN Trading assuming that collection is made within the discount period? 3. FDN Trading had the following selected transactions on November 5: Purchase of furniture on account, P24,000 Purchase of merchandise for P31,000 less 10 on terms 40% down and the balance 2/10 n/30 Sale of…
FN Trading recorded the following events involving a recent purchase of merchandise: Received goods for P45,000, terms 1/10, n/30. Returned P800 of the shipment for credit. Paid P300 freight on the shipment on terms FOB Destination Point. Paid the invoice within the discount period. How much is the net cost of purchases?
On June 1, 2023, AAA Company sold merchandise with an invoice price of 5,000,000 to a customer. The entity allowed trade discounts of 15%, and 10%. Credit terms were 3/10, n/30 and the sale was made FOB destination. AAA Company paid 100,000 of the delivery cost. a. Compute the total amount of purchases to be included on the buyer’s inventory in the determination of cost of goods available for sale if payment was made beyond the discount period. b. What is the full amount received by AAA company if payment was made on June 11, 2023?
Leni Company regularly buys merchandise from Lmao Company and is allowed trade discounts of 15% and 5% from the list price. On July 16, Leni made a purchase and received an invoice with a list price of P120,000 and terms of 3/10; n/30. Shipping terms is FOB shipping point and freight cost amounted to P2,800. Leni Company uses the net price method of recording its purchases. Assuming that the company paid the account on August 5, what is the cost of the merchandise purchases?
Coronado Industries made a $26000 sale on account with the following terms: 3/10, n/30. If the company uses the net method to record sales made on credit, what is/are the debit(s) in the journal entry to record the sale?
uilder Company uses the net price method of accounting for cash discounts. In one of its transactions on October 15, 2019, Guilder sold merchandise with a list price of P500,000 to a customer who was given a trade discount of 20% and 15%. Credit terms were 2/10, n/30. The goods were shipped FOB destination, freight collect. Total freight charge paid by the customer was P7,000. On October 20, 2019, the customer returned damaged goods originally billed at P60,000. What is the net realizable value of this account receivable on October 31, 2019? Choices: P273,000 P340,000 P233,200 P280,000
Kingbird, Inc. purchased merchandise inventory with an invoice price of $13100 and credit terms of 2/10, n/30. What is the net cost of the goods if Kingbird, Inc. pays within the discount period?
On June 1, 2021, Pitt Company sold merchandise with a list price of P5,000,000 to Burr on account. Pitt allowed trade discounts of 30% and 20%. On June 11, 2021, the customer paid in full. Credit terms were 2/10, n/30 and the sale was made FOB shipping point. Pitt prepaid P200,000 of delivery costs for Burr as an accommodation. 1. What amount should be reported as sales revenue? a. 5,000,000 b. 2,800,000 c. 3,500,000 d. 2,500,000 2. What amount was received by Pitt from Burr as remittance in full? a. 2,744,000 b. 2,940,000 c. 2,944,000 d. 3,140,000
JBL undertook the following transactions for the month of Nov Purchased merchandise or $80,000 less 5-5 on terms 3/10 n/30. The entity paid freight for $2,500 and returned defective goods worth $7,000. JBL paid this account in full within the discount period. How much was the purchase discount?
Presented below are transactions related to Star Company. On June 4, Star Company sold OMR670,000 of merchandise to Ahmed Co., terms 2/10, n/30, FOB shipping point. The cost of the merchandise sold was OMR450,000. On June 9, Ahmed Co. was granted an allowance of OMR30,000 for merchandise purchased on June 4. On June 14, Star Company received the balance due from Ahmed Co. Instructions: Prepare the journal entries to record these transactions on Star Company’ records. using a perpetual inventory system. Assume that Star Company received the balance due from Ahmed Co. on July 2 of the following year instead of June 14. Prepare the journal entry to record the receipt of payment on July 2.
Merchandise invoiced at $8,900 is sold on terms 1/10, n/30. If the buyer pays within the discount period, what amount will be reported on the income statement as net sales?