Question
AB Ltd. sells on terms of 10/7, n/60, F.O.B. shipping point. Credit terms and freight terms for its purchases vary with the supplier. Selected transactions
AB Ltd. sells on terms of 10/7, n/60, F.O.B. shipping point. Credit terms and freight terms for its purchases vary with the supplier. Selected transactions involving merchandise held for resale during the period are listed below. All purchases are recorded at invoice price.
Day 1. Sold merchandise for $22,300.
Day 2. Paid freight on shipment for $150, and billed the customer for the charges.
Day 4. Issued a credit memo for $8,700 worth of merchandise returned by the customer.
Day 6. Received the amount due from the customer.
Required 1: The balance of Accounts Receivable in day 3 must have been: $_____
Required 2: The balance of Accounts Receivable in day 5 must have been: $_____
Required 3: The balance of Sales Returns and Allowances in day 7 must have been: $_____
Required 4: The balance of Sales Discounts in day 10 must have been: $_____
Required 5: The amount of cash receive on day 6 must have been: $_____
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