Question

, was added to the invoice amount. On June 20, it returned $1,120 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it is entitled to. The cash paid on June 24 equals:A company purchased $10,400 of merchandise on June 15 with terms of 3/10, n/45, and FOB shipping point. The freight charge, $700, was added to the invoice amount. On June 20, it returned $1,120 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it is entitled to. The cash paid on June 24 equals:

Answer 1

Answer:

The cash paid on June 24 equals: $9,780

Explanation:

When the company purchased merchandise, the following entries are recorded.

Merchandise $10,400 (debit)

Freight Charges $700 (debit)

Accounts Payable $11,100 (credit)

When the company returned merchandise, the following entries are recorded.

Accounts Payable $1,120 (debit)

Merchandise $1,120 (credit)

When the company pay for the merchandise, the payment is made within the discount period and is eligible for a cash discount of 3%.

Accounts Payable $9,980 (debit)

Discount Received $200 (credit)

Cash $9,780 (credit)

Conclusion :

The cash paid on June 24 equals: $9,780