Merchandise is purchased for $6,200 on September 2 subject to terms of 2/10, n/30, FOB destination. Freight costs paid by the seller totaled $200. What is the required payment if paid on September 11?

Question

BlackTom AI · Accepted Answer

We start by identifying the key terms of the purchase and how they affect the amount due.
First, the purchase price is 6,200 and the terms are 2/10, n/30, FOB destination. This means a 2% cash discount is available if payment is made within 10 days, and the seller pays freight because the shipping term is FOB destination.
Since the date of purchase is September 2 and payment is on September 11, the payer is within the 10-day discount window, so the 2% discount applies.
Next, calculate the discount: 2% of 6,200 equals 0.02 × 6,200 = 124.
Subtract the discount from the original invoice price to get the amount due: 6,200 − 124 = 6,076.
Consider the freight cost: because the seller is responsible for freight under FOB destination, the buyer does not add the 200 freight cost to the invoice amount. The invoice amount already reflects the purchase price, and the discount is applied to that amount rather than to any freight charges that the seller would have paid.
Now evaluate the answer choices:
- None of the other three: This would be chosen if none of the other options matched the correct discounted amount, but one option does match 6,076, so this is not correct.
- $6,120: This would correspond to applying a 2% discount to a base of 6,200 but only if the discount were 80, which is inconsistent with 2/10 terms.
- $6,076: This matches the purchase price 6,200 minus the 2% discount 124, yielding 6,076, with FOB destination not adding any freight to the buyer’s payment.
- $5,880: This would imply a discount of 320 from 6,200, which would be 5.16% or would require a different discount term, not the 2/10 terms given.
Thus, the reasoning aligns with selecting the amount 6,076 as the payment due within the discount period, while freight remains a seller responsibility under FOB destination.

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Merchandise is purchased for $6,200 on September 2 subject to terms of 2/10, n/30, FOB destination. Freight costs paid by the seller totaled $200. What is the required payment if paid on September 11?

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ACCT*2200*W04 Final- Requires Respondus LockDown Browser

Merchandise is purchased for $6,200 on September 2 subject to terms of 2/10, n/30, FOB destination. Freight costs paid by the seller totaled $200. What is the required payment if paid on September 11?

View Explanation

Log in for full answers

Similar Questions

XYZ Ltd owed a creditor $400, with a 3% discount applied. The payment was made within the discount period. The impact of this entry for XYZ Ltd is:

Using the gross method, purchase discounts lost are [ Select ] Included as a reduction to purchase returns. Included in inventory purchased. Deducted from discount income. Added to accounts payable. No discounts are allowed under the gross method

More Practical Tools for Students Powered by AI Study Helper

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