Question

Foster Company uses the gross method and a perpetual inventory system. Assuming the following entries, compute the amount that Foster Company received on December 12.

December 2 Sold goods costing $9,000 to Hughes Company on account, $15,000, terms 5/10, n/30. The goods are shipped FOB Shipping Point, Freight Prepaid by Seller, $330.
December 8 Hughes Company returned undamaged merchandise previously purchased on account, $3,100.
December 12 Received the amount due from Hughes Company.

Answer 1

Particulars Amount

Gross sales $15,000

Less: Sales returns $3,100

Less: Sales Discount $595 (15,000 -3,100 )*5%

Add: Freight prepaid by seller $330

Amount Foster Co. received on Mar. 18 $11,635