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A furniture maker purchased $650 of wood on March 1. The terms offered were 2/10, n/30. The furniture maker paid the total amount due on March 11. How much did the furniture maker pay?

Respuesta :

jepessoa

Answer:

$637

Explanation:

Since the furniture maker paid the invoice within the discount period (on the last possible date), he should receive the  2% discount. That means that he/she will pay $650 x (1 - 2%) = $637

To record the purchase and payment, the furniture maker would have made the following journal entries:

March 1, wood purchased on credit

Dr Materials inventory 650

    Cr Accounts payable 650

March 11, invoice is paid

Dr Accounts payable 650

    Cr Cash 637

    Cr Purchase discounts 13