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Merchandise
Freight
Paid by Seller Freight Terms
Returns and
Allowances
a. $180,000 $3,000 FOB shipping point, 1/10, n/30 $20,000
b. 88,000 1,250 FOB destination, 2/10, n/30 9,000
Answer:
a.
$161,400. Purchase of $180,000 less return of $20,000 less the discount of $1,600 [($180,000 – $20,000) × 1%] plus $3,000 of shipping.
b.
$77,420. Purchase of $88,000 less return of $9,000 less the discount of $1,580 [($88,000 – $9,000) × 2%].