Carrie & Runnels Bikes Plus, Inc., made the following purchases in December of the current year:

December 5 Purchased $2,600 of merchandise, terms 3/10, n/30, FOB destination

December 14 Purchased $6,150 of merchandise, terms 1/10, n/60, FOB shipping point

December 24 Purchased $8,375 of merchandise, terms 2/05, n/20, FOB destination

Requirements

1. For each purchase, by what date is the payment due, assuming the company takes advantage of the discount?

2. For each purchase, when is the payment due if the company does not take advantage of the discount?

3. In each case, what is the amount of the cash discount allowed?

4. Assume the freight charges are $365 on each purchase. For which purchase(s) is Bikes Plus responsible for the freight charges?

5. What is the total cost of inventory for Bikes Plus for the month of December, assuming that all discounts were taken?