Details of a purchase invoice and related credit memo are summarized as follows:
Invoice:
Cost of merchandise listed on purchase invoice
$6,500
Prepaid freight charge added to invoice
150
Terms, FOB shipping point, 1/10, n/eom
Credit memo: Cost of merchandise returned
$1,500
Assume that the credit memo was received prior to payment and that the invoice is paid within the discount period. Determine the following:
(a)Amount of the cash discount allowed.(b)Amount to be paid by the purchaser if the discount is taken.(c)Cost of the merchandise to the purchaser if the discount is not taken.

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The Answer of Details of a purchase invoice and related credit memo are summarized as follows:
Invoice:
Cost of merchandise listed on purchase invoice
$6,500
Prepaid freight charge added to invoice
150
Terms, FOB shipping point, 1/10, n/eom
Credit memo: Cost of merchandise returned
$1,500
Assume that the credit memo was received prior to payment and that the invoice is paid within the discount period. Determine the following:
(a)Amount of the cash discount allowed.(b)Amount to be paid by the purchaser if the discount is taken.(c)Cost of the merchandise to the purchaser if the discount is not taken.

Details of a Purchase Invoice and Related Credit Memo Are