Question

U LIL 7. Jake's Market recorded the following events involving a recent purchase of merchandise: a. Received good for $60,000 terms 2/10,n/30 b. Returned $1,200 of the shipment for credit c. Paid $300 freight on the shipment. d. Paid the Invoice within the discount period The company's Inventory increased by? A. $57,624 B. $57,918 C. $57,924 D. $59,100 8. On July 9, Sheb Company sells goods on credit to Wooley Company for $5,000, terms 1/10,n/60. Sheb receives payment on July 18, The entry by Sheb on July 18 is: a. DR: Cash 5000, CR: AR 5000 b. DR: Cash, CR: Sales Discount 50, AR 4,950 c. DR: Cash 4950, Sales Discount 50, CR: AR 5000 d. DR: Cash 5050, CR: Sales discounts 50, AR 5000 9. Cleese Company sells merchandise on account for $5000, to Langston Company with credit terms of 2/10,n/30. Langston company returns $1000 of merchandise that was damaged along with a check to settle the account with the discount period. What is the amount of the check? a. $3,920 b. $4,000 c. $4,900 d. $4,920 10. In a perpetual inventory system, the cost of goods sold account is used?

im very confused on the part where its like a fraction, for example 2/10,n,30. if i could get a brief explanation that would help me so much for these study questions

Answer 1

terms 2 /10 , n / 30 means 2% discount will be given if paid within 10 days, the maturity period of the bill is 30 days.

7.C.$57,924.

working:

total value of goods	60,000
less: returns	(1,200)
net value of goods	58,800
less: discount (58,800*2%)	(1,176)
amount net off discount	57,624
add:freight	300
total amount of increase in inventory	57,924

8.c.Dr.cash 4950, sales discount 50 cr: AR 5000.

amount = 5000*(1-0.01)

=>4,950.

discount amount = 5000 - 4950=>50.

9.a.$3,920.

gross value	5000
less:returns	(1000)
net value	4000
less: discount (4000*2%) since paid within discount period	(80)
amount of check	3,920