Insert the letter for each term in the blank space beside the definition that it most closely matches: k02

Spare Parts was organized on May 1, 2005, and made its first purchase of merchandise on May 3.
The purchase was for 1,000 units at a price of $10 per unit. On May 5, Spare Parts sold 600 of the units for $14 per unit to DeSoto Co. Terms of the sale were 2/10, n/60. Prepare entries for Spare Parts to record the May 5 sale and each of the following separate transactions a through c using a perpetual inventory system.

a. On May 7, DeSoto returns 200 units because they did not fit the customer’s needs. Spare Parts restores the units to its inventory.

b. On May 8, DeSoto discovers that 50 units are damaged but of some use and, therefore, keeps the units. Spare Parts sends DeSoto a credit memorandum for $300 to compensate for the damage.

c. On May 15, DeSoto returns 100 defective units and Spare Parts concludes that these units cannot be resold. As a result, Spare Parts discards them—it removes these units’ cost from cost of good sold and records a loss from defective merchandise.

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A. Cash discount. B. Credit period c. Discount period D. FOB destination E. FOB shipping point F. Gross profit G. Merchandise inventory H. Purchase discount 1. Sales discount J. Trade discount 1. Ownership of goods is transferred when delivered to the buyer's place of business. 2. Time period in which a cash discount is available. 3. Difference between net sales and the cost of goods sold. 4. Reduction in a receivable or payable if it is paid within the discount period. 5. Purchaser's description of a cash discount received from a supplier of goods. 6. Ownership of goods is transferred when the seller delivers goods to the carrier. 7. Reduction below list or catalog price that is negotiated in setting the price of goods. 8. Seller's description of a cash discount granted to buyers in return for early payment. 9. Time period that can pass before a customer's payment is due. 10. Goods a company owns and expects to sell to its customers.