Author Question: Montana Company made the following purchases during the month of September: Sept. 8 Purchased ... (Read 91 times)

chads108 · **on:** Jul 5, 2018

Montana Company made the following purchases during the month of September:

Sept. 8 Purchased 5,600 of merchandise, terms 2/10, n/30,
FOB destination, freight cost 100
Sept. 16 Purchased 12,300 of merchandise, terms 2/15, n/60,
FOB shipping point, freight cost 100
Sept. 21 Purchased 15,000 of merchandise, terms 3/10, n/20,
FOB destination, freight cost 100
Sept. 28 Purchased 10,000 of merchandise, terms 1/15, n/45,
FOB shipping point, freight cost 100

Required:
1. Complete the chart below for each of the four purchases.

Sept. 8 Sept. 16 Sept. 21 Sept. 28
a. due date, assuming the discount is taken
b. last day to pay if the discount is NOT taken
c. amount of discount
d. freight cost paid by Montana Company

2. Assuming that the selling company accepts all discounts, what is the total cost of purchases for the month?

Question 2

Kristin's Boutiques has identified the following items for possible inclusion in its December 31 inventory. Which ofthe following would notbe included in the year-end inventory?
a. Merchandise purchased FOB shipping point was picked up by the freight company but had still not arrived at
Kristin's Boutique as of December 31.
b. Kristin has in its warehouse merchandise on consignment from Abby Co.
c. Kristin has sent merchandise to various retailers on a consignment basis.
d. Kristin has merchandise on hand which has been returned by customers because of wrong size.

upturnedfurball · **Reply #1 on:** Jul 5, 2018

Answer to Question 1

1.
Sept. 8 Sept. 16 Sept. 21 Sept. 28
a. Sept. 18 Oct. 1 Oct. 1 Oct. 13
b. Oct. 8 Nov. 15 Oct. 11 Nov. 12
c. 112 246 450 100
d. 0 100 0 100

2. 42,192 = (5,600 - 112) + (12,300 246 + 100) + (15,000 450) + 10,000 - 100 + 100

Answer to Question 2

b