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Purchases Transactions Nieman Company purchased merchandise on account from Springhill Company for $11,000, terms 2/10, n/30. Nieman returned merchandise with an invoice amount of $1,800
Purchases Transactions Nieman Company purchased merchandise on account from Springhill Company for $11,000, terms 2/10, n/30. Nieman returned merchandise with an invoice amount of $1,800 and received full credit. a. If Nieman Company pays the invoice within the discount period, what is the amount of cash required for the payment? If required, round the answer to the nearest dollar. b. What account is debited by Nieman Company to record the return? Accounts Payable-Springhill Company The debits and credits from four related transactions, (1) through (4), are presented in the following T accounts. Assume that the freight terms were FOB shipping point and that the credit terms were 1/10, n/30. Cash Accounts Payable (2) 150 (3) 1,980 (1) 13,860 (4) 11,880 (4) 11,880 Inventory (1) 13,860 (3) 1,980 (2) 150 a. Describe each transaction. 1. Purchased merchandise on account net of discount. 2. Paid freight. 3. An allowance for return of merchandise was granted by the creditor. 4. Paid the balance due within the discount period. b. Determine the invoice amount of the merchandise that was returned in (3). X
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