Problem 3: Pasado Iyan Company uses the gross method of accounting for cash discounts. In one of its transactions on December 28, 2023, Pasado Iyan Company sold merchandise with a list price of P6,000,000 to a client who was given a trade discount of 20% and 10%. Credit terms given by Pasado Iyan Company were 2/10, n/30.

The goods were shipped FOB destination, freight collect. The total freight charge paid by the client was P36,000. On December 30, 2023, the client returned damaged goods originally billed at P120,000. Pasado Iyan Company estimates that the client will take advantage of the cash discount before the end of the 10-day discount period.

How much is the total reduction in the list price to arrive at the invoice price as a result of the sale of merchandise by Pasado Iyan Company on December 28, 2023?

What amount should be recognized as accounts receivable as a result of the sale of merchandise by Pasado Iyan Company on December 28, 2023?

What amount should be debited to Sales Discount account as a result of the sale of merchandise by Pasado Iyan Company on December 28, 2023?

What is the net realizable value of the accounts receivable on December 31, 2023?

Assuming Sioban Company uses the net method of accounting for cash discounts, what amount should be recognized as accounts receivable as a result of the sale of merchandise by Pasado Iyan Company on December 28, 2023?