Question

On April 6, 2018, Home Furnishings purchased $36,000 of merchandise from Una's Imports, terms 1/10 n/45. On April 8, Home Furnishings returned $7,600 of the merchandise to Una's Imports for credit. Home Furnishings paid cash for the merchandise on April 15, 2018.

Required

1. What is the amount that Home Furnishings must pay Una's Imports on April 15?

2. Record the events in a horizontal statements model. In the Cash Flow column, use OA to designate operating activity, IA for investment 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.

3. How much must Home Furnishings pay for the merchandise purchased if the payment is not made until April 20, 2018?

4. Record the payment of the merchandise in Requirement (c) in a horizontal statements. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event.

What is the amount that Home Furnishings must pay Una's Imports on April 15?

	Net amount due $27,500

Answer 1

What is the amount that Home Furnishings must pay Una's Imports on April 15?
Payment within 10 days from date of purchase.
Purchase of inventory									$       36,000
Less: Purchase returned									$         7,600
Net Purchase									$       28,400
Less: Purchase Discount (28400*1%)									$             284
Amount that Home Furnishings must pay Una's Imports on April 15									$       28,116
Events	Balance Sheet				Income Statement			Statements of Cash flow
	Assets		Liabilities	Equities
	Cash	Inventory	Account Payable	Retained earnings	Income	Expense	Net Income	Amount	Actiity
Purchase of inventory		$       36,000	$       36,000
Purchase returned		$       (7,600)	$       (7,600)
Payment	$     (28,116)	$           (284)	$     (28,400)					$ (28,116)	OA
Total Effect	$     (28,116)	$       28,116	$                 -	$           -	$           -	$           -	$           -	$ (28,116)	NC
How much must Home Furnishings pay for the merchandise purchased if the payment is not made until April 20, 2018?
Payment not within 10 days from date of purchase.
Purchase of inventory									$       36,000
Less: Purchase returned									$         7,600
Net Purchase									$       28,400
Less: Purchase Discount (Not applicable)
Amount that Home Furnishings must pay Una's Imports on April 20									$       28,400
Events	Balance Sheet				Income Statement			Statements of Cash flow
	Assets		Liabilities	Equities
	Cash	Inventory	Account Payable	Retained earnings	Income	Expense	Net Income	Amount	Actiity
Purchase of inventory		$       36,000	$       36,000
Purchase returned		$       (7,600)	$       (7,600)
Payment	$     (28,400)		$     (28,400)					$ (28,400)	OA
Total Effect	$     (28,400)	$       28,400	$                 -	$           -	$           -	$           -	$           -	$ (28,400)	NC