Question

1. An invoice, with payment terms of 2/10, 1/30, was issued on April 28 for AED 250.00. If the payment was made on May 12, the amount of payment will be (Round your answer to the nearest dirham.) AED Forever Jewelers uses the gross method and a perpetual inventory system. On April 2. Forever sold merchandise with a cost of AED 1,700 for AED 5,600 to a customer on account with terms of 2/15, 1/30. Which of the following would be included in the journal entry to record the cash receipt on April 10? Credit/Debit to Sales Discount in the amount of AED (Both must be correct for credit) 3. Carpenter, Inc. generated sales revenues of AED 1,400,000 in 2019. Its cost of goods sold amounted to $50,000. Calculate Carpenter's gross profit percentage. %.

Answer 1

1) payment for invoice with terms 2/10,n/30 means

2: the 2% discount that the buyer can receive.

10: the number of days from the invoice date within which payment has to be made to obtain the 2% discount.

N: net or full amount. If payment is made after 10 days, the net or full amount will have to be paid.

30: the maximum credit period that the buyer is entitled to.

so here invoice date is april 28th but actual payment date is may 12th so no discount is given only full amount is actual payment so answer is AED 250000

2) payment for invoice with terms 2/15,n/30 means

2: the 2% discount that the buyer can receive.

15: the number of days from the invoice date within which payment has to be made to obtain the 2% discount.

N: net or full amount. If payment is made after 10 days, the net or full amount will have to be paid.

30: the maximum credit period that the buyer is entitled to.

so here the invoice date is April 2nd payment date is April 10th. So amount received with in 15 days from the date of invoice.So cash discount @2% should be given

discount amount is AED 5600*2% = 5600*2/100=112

Entry for sale is :

Accounts Receivables   A/c Dr 5600

  To Sales A/c Cr 5600

Entry for cash receipt is:

Cash A/c Dr 5488

Sales discount A/c Dr 112

To Accounts Receivables  A/c Cr 5600

3) Here sales are in AED currency

Sales = AED 1400000

Purchases= AED 560000

Gross Profit = 1400000-560000=AED840000

Gross Profit% =Gross Profit/Sales*100= 840000*100/1400000=60%

Gross Profit =60%