LO 6.1What do credit terms of 4/10, n/30 mean in regard to a purchase?
LO 6.1If a retailer made a purchase in the amount of $350 with credit terms of 2/15, n/60. What would the retailer pay in cash if they received the discount?
LO 6.2What are two advantages and disadvantages of the periodic inventory system?
LO 6.2Sunrise Flowers sells flowers to a customer on credit for $130 on October 18, with a cost of sale to Sunrise of $50. What entry to recognize this sale is required if Sunrise Flowers uses a perpetual inventory system?
LO 6.3If a retailer purchased inventory in the amount of $750, terms 2/10, n/60, returned $30 of the inventory for a full refund, and received an allowance for $95, how much would the discount be if the retailer remitted payment within the discount window?
LO 6.3A retailer discovers that 50% of the total inventory items delivered from the manufacturer are damaged. The original purchase for all inventory was $1,100. The retailer decides to return 20% of the damaged inventory for a full refund and keep the remaining 80% of damaged inventory. What is the value of the merchandise returned?
LO 6.4Name two situations where cash would be remitted to a customer from a retailer after purchase.
LO 6.4A customer discovers 60% of the total merchandise delivered from a retailer is damaged. The original purchase for all merchandise was $3,600. The customer decides to return 35% of the damaged merchandise for a full refund and keep the remaining 65%. What is the value of the merchandise returned?
LO 6.5A buyer purchases $250 worth of goods on credit from a seller. Shipping charges are $50. The terms of the purchase are 2/10, n/30, FOB Destination. What, if any, journal entry or entries will the buyer record for these transactions?
LO 6.5Which statement and where on the statement is freight-out recorded? Why is it recorded there?
LO 6.6What is the difference between a multi-step and simple income statement?
LO 6.6The following is select account information for August Sundries. Sales: $850,360; Sales Returns and Allowances: $148,550; COGS: $300,840; Operating Expenses: $45,770; Sales Discounts: $231,820. If August Sundries uses a multi-step income statement format, what is their gross margin?
LO 6.7A customer discovers 50% of the total merchandise delivered from the retailer is damaged. The original purchase for all merchandise was $5,950. The customer decides to return 40% of the damaged merchandise for a full refund and keep the remaining 60%. What is the value of the merchandise returned?