Question

Saved On April 6, Home Furnishings purchased $45,000 of merchandise from Una's Imports, terms 1/10,n/45. On April 8, Home Furnishings returned $9,500 of the merchandise to Una's Imports for credit. Home Furnishings paid cash for the merchandise on April 15. Required a. What is the amount that Home Furnishings must pay Una's Imports on April 15? b. Record the events in a horizontal statements model in the Cash Flow column, use OA to designate operating activity, IA for investing activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank c. How much must Home Furnishings pay for the merchandise purchased if the payment is not made until April 20? d. Record the payment of the merchandise in Requirement (c) in a horizontal statements model. In the Cash Flow column, use OA to designate operating activity, IA for investing activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank Complete this question by entering your answers in the tabs below. ces Required A Required B Required c Required D What is the amount that Home Furnishings must pay Una's Imports on April 157 Net amount due Required B

Answer 1

AAns : ON 6TH APRIL HOME FURNISHINGS PURCHASED THE MERCHANDISE OF COST $45000

ON 9TH APRIL HOME FURNISHINGS RETURNED MERCHANDISE COST $9500 BACK TO UNA's IMPORT

ON 15TH APRIL HOME FURNISHINGS MADE THE PAYMENT

BY THE CONSIDERING THE TERM 1/10,n/45 MEANS IF PAYMENT IS MADE WITHIN 10 DAYS A DISCOUNT OF 1% WILL BE PROVIDED ON PAYABLE AMOUNT

THUS PAYABLE IS :

COST OF MERCHANDISE = $ 45000

RETURNED PRODUCT COST = ($ 9500)

REMAINING = $ 35500

DISCOUNT FOR PAYING WITHIN 10 DAYS = ($ 355) (35500*1%)

$ 35145

BAns.  CASH FLOW COLOUMN CONSISTS OF ONLY THOSE TRANSACTIONS WHICH IMPACTS CASH

ON 6TH APRIL - NO HEAD OF CASH FLOW COLOUMN WILL GET IMPACTED BECAUSE THEIR IS NO OUTFLOW / INFLOW OF MONEY

OA - NIL, IA - NIL, FA - NIL, NC- NIL   

ON 8TH APRIL- STILL NO HEAD IMPACTS BECAUSE WE RETURNED GOODS BUT ME DID'T GET ANY CASH

   OA - NIL, IA - NIL, FA - NIL, NC- NIL

ON 15TH APRIL- HOME FURNISHING MADE A PAYMENT OF $ 35145 IN CASH FORM SO IT IMPACTS THE CASH FLOW COLOUMN AND PAYMENT IS MADE FOR PURCHASE OF MERCHANDISE WHICH IS OPERATING IN NATURE SO IT COMES UNDER HEAD O.A

OA - $ 35145 , IA - NIL, FA - NIL, NC- (35145)

CASH NEVER BE IN A NEGATIVE FIGURE BUT IN THIS CASE SINCE OPENING CASH IS NOT SPECIFIED CLOSING WILL BECOME -VE

C Ans: ON 6TH APRIL HOME FURNISHINGS PURCHASED THE MERCHANDISE OF COST $45000

ON 9TH APRIL HOME FURNISHINGS RETURNED MERCHANDISE COST $9500 BACK TO UNA's IMPORT

ON 20TH APRIL HOME FURNISHINGS MADE THE PAYMENT

BY THE CONSIDERING THE TERM 1/10,n/45 MEANS IF PAYMENT IS MADE WITHIN 10 DAYS A DISCOUNT OF 1% WILL BE PROVIDED ON PAYABLE AMOUNT, IN THIS CASE PAYMENT MADE AFTER 10 DAYS HENCE NO DISCOUNT WILL BE PROVIDED ( GAP BETEEN 6TH APRIL TO 20TH APRIL)

THUS PAYABLE IS :

COST OF MERCHANDISE = $ 45000

RETURNED PRODUCT COST = ($ 9500)

REMAINING = $ 35500

DISCOUNT FOR PAYING WITHIN 10 DAYS = ($ 0 )   

$ 35500

D Ans : CASH FLOW COLOUMN CONSISTS OF ONLY THOSE TRANSACTIONS WHICH IMPACTS CASH

ON 6TH APRIL - NO HEAD OF CASH FLOW COLOUMN WILL GET IMPACTED BECAUSE THEIR IS NO OUTFLOW / INFLOW OF MONEY

OA - NIL, IA - NIL, FA - NIL, NC- NIL   

ON 8TH APRIL- STILL NO HEAD IMPACTS BECAUSE WE RETURNED GOODS BUT ME DID'T GET ANY CASH

   OA - NIL, IA - NIL, FA - NIL, NC- NIL

ON 20TH APRIL- HOME FURNISHING MADE A PAYMENT OF $ 35500 IN CASH FORM SO IT IMPACTS THE CASH FLOW COLOUMN AND PAYMENT IS MADE FOR PURCHASE OF MERCHANDISE WHICH IS OPERATING IN NATURE SO IT COMES UNDER HEAD O.A

OA - $ 35500 , IA - NIL, FA - NIL, NC- (35500)

CASH NEVER BE IN A NEGATIVE FIGURE BUT IN THIS CASE SINCE OPENING CASH IS NOT SPECIFIED CLOSING WILL BECOME -VE