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 that 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

Cash received = Sales - Sales discount + Prepaid freight - Cost of merchandise returned = $12,000 - (1% × $12,000) + $900 - [$500 - (1% × $500)] = $12,000 - $120 + $900 - ($500 - $5) = $12,780 - $495 = $12,285

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