Lasky Company sold merchandise with a list price of $ 60,000 on July 1. For each of the following independent assumptions, calculate (1) the gross selling price used to record the sale and (2) the amount that the buyer would have to remit when paying the invoice.

The trade discounts are taken off of the price of the merchandise, one after the other. Example: If we sold $50,000 of merch, and the trade discounts were 40%, 20%, we would take $50,000 * .6 * .8 to find our answer of $24,000. Then we apply the discount to that number.

Trade Discount

Credit

Date

Gross

Payment

Granted

Terms

Paid

1. 30%, 20%

2/10, n/30

July 10

2. 40%, 10%

2/EOM, n/60

August 10

3. 30%, 10%, 5%

3/10/EOM, n/60

August 10

4. 40%

1/10, n/30

July 12

Exercise F

Raiser Company purchased goods at a gross selling price of $ 2,400 on August 1. Discount terms of 2/10, n/30 were available. For each of the following independent situations, determine (1) the cash discount available on the final payment and (2) the amount paid if payment is made within the discount period.

Purchase

Here we take the price of the goods sold $2400, subtract the purchase allowance granted, and then apply the .02 discount. The freight isn't used but is given so you can see that it would be a part of the problem if we did all of it.

Transportation

Freight

Allowance

Terms

Paid (by)

Granted

1. FOB shipping point

$240 (buyer)

$480

2. FOB destination

120 (seller)

240

3. FOB shipping point

180 (seller)

720

4. FOB destination

192 (buyer)

120