AGRI 1005 Chapter : LEARN SMART HOMEWORK ASSIGNMENTS DUE DATES
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Assignment: Accounting for Purchases and Cash Payments
Part 1
List four procedures that a business should use to control its cash payments.
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Part 2 (9 points)
Determine the due dates and discount amount for the following example:
A software company frequently purchases merchandise on account. When it receives an invoice, a clerk puts a processing stamp on the invoice indicating the due date, the amount of any discount, and the amount to be paid.
The following invoices were received during March:
S. No | Invoice Number | Invoice Date | Credit Terms | Invoice Amounts |
1. | 2456 | January 5 | 2/10, n/30 | $3,000.00 |
2. | 7895 | January 7 | 3/10, n/30 | $5,500.00 |
3. | 6785 | January 12 | 2/15, n/60 | $729.95 |
4. | 7859 | January 23 | 2/10, n/30 | $1,526.50 |
Instructions: The first invoice has been completed as an example. Prepare a form similar to the one that follows using your spreadsheet software. For each invoice do the following:
Determine the due date. Assume that the software company always pays invoices within the discount period.
Calculate the discount amount, if any.
Calculate the amount to be paid.
Calculate the amount the software company will save by taking advantage of all discounts.
Invoice Number | Invoice Date | Credit Terms | Invoice Amount | Due Date | Discount Amount | Amount to be Paid | |
1. | 2456 | Jan. 5 | 2/10, n/30 | $3000.00 | Jan. 15 | $60.00 | $2940.00 |
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