i need help for an accounting presentation... (1 Viewer)

[Dj Fuzion]

Hey guys..the presentation i have to do is on this problem...

"Suppose toys r us buys 150,000 worth of lego toys (inclusive of gst) om credit terms of 3/15, n/45. Unfortunatley the goods are damaged in shipment, so toys r us returns 20,000 (orginal amount before any discounts) of the merchandise to lego.

Ho much must toys r us pay lego

1) after the discount period)

2) within the discount period)


I need to do a presne4tation on this and we havent studied the topic as yet so its really hard for me to understand, can somene please help me i'd much appreciate.


p.s- also what else can i talk about besides the answers? like what else details can i use (e.g can i talk about discounts on inventory etc etc?)



thank you thank you to whoever replies.:worried:

 

[Soma]

Theres a 3% discount if paid within 15 days and the whole thing must be paid within 45 days regardless.

Depending on whether you use perpetual or periodic method you will debit purchases or inventory.

I'm sure your book will cover this shit in detail.

 

[jase_]

3/15, n/45 means that there is a 3% discount if you pay within 15 days and no discount up to 45 days. I hope this helps you in calculating the rest of it, which should be straight forward now.

Maybe give an explanation of how inventory discounts work, as I just said above and talk about how this encourages suppliers to pay up early and that companies give discounts to ensure they get paid but also the sooner they get revenue, the sooner they can report it.