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22 June, 03:41

Halibut Company purchased merchandise on account from a supplier for $18,600, terms 2/10, n/30. Halibut Company returned $5,000 of the merchandise and received full credit. a. If Halibut Company pays the invoice within the discount period, what is the amount of cash required for the payment

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  1. 22 June, 05:56
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    A.$13,328

    B. Merchandise Inventory

    Explanation:

    Calculation for Halibut Company the amount of cash required for the payment

    Calculation for Purchase:

    = [$18,600 - ($18,600 * 2%) ]

    =$18,600-$372

    =$18,228

    Calculation for the return:

    [ ($5,000 - ($5,000 * 2%) ]

    $5,000-$100

    =$4,900

    Hence:

    Purchase - Return

    =$18,228 - $4,900

    =$13,328

    Therefore the amount of cash required for the payment will be $13,328

    b. The account to be credited by Halibut Company to record the return will be Merchandise Inventory.
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