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On June 10, Diaz Company purchased $9,500of merchandise from Taylor Company, FOB shipping point, terms2/10, n/30. Diaz pays the freight costs of $590on June 11.
On June 10, Diaz Company purchased $9,500of merchandise from Taylor Company, FOB shipping point, terms2/10, n/30. Diaz pays the freight costs of $590on June 11. Damaged goods totaling $330are returned to Taylor for credit on June 12. The fair value of these goods is $75. On June 19, Diaz pays Taylor Company in full, less the purchase discount. Both companies use a perpetual inventory system.
(Also what's the difference between freight in and freight out?)
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