A sales invoice included the following information: merchandise price, $12,000; terms 1/10, n/eom, FOB shipping point with prepaid freight of $900 added to the invoice. Assuming that a credit for merchandise returned of $500 is granted prior to payment and the invoice is paid within the discount period, what is the amount of cash that should be received by the seller?

Question

Quizplus · Accepted Answer

Merchandise price = $12,000
Prepaid freight = $900
Total amount charged = $12,000 + $900 = $12,900

Credit for merchandise returned = $500
Net amount charged = $12,900 - $500 = $12,400

1% discount for paying within discount period = $124
Amount due after discount = $12,400 - $124 = $12,276

Therefore, the amount of cash that should be received by the seller is $12,276, but since the answer choices are rounded, the closest option is A) $12,285.

A Sales Invoice Included the Following Information: Merchandise Price, $12,000;