Details of a Purchase Invoice and Related Credit Memo Are

question 192

Essay

Details of a purchase invoice and related credit memo are summarized as follows:
$\begin{array}{llcc} \text { Invoice: } & \text { Cost of merchandise listed on purchase invoice } &\$ 6,500 \\& \text { Prepaid freight charge added to invoice } & 150 \\& \text { Terms, FOB shipping point, 1 / 10, n/ eom } & \\\\ \text { Credit memo: } & \text {Cost of merchandise returned } &\$ 1,500 \\\end{array}$
Assume that the credit memo was received prior to payment and that the invoice is paid within the discount period.Determine the following:
a Amount of the cash discount allowed.
b Amount to be paid by the purchaser if the discount is taken.
c Cost of the merchandise to the purchaser if the discount is not taken.

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Definitions:

Multinational Corporations

Large companies that operate in several countries around the world, often having a centralized head office where they coordinate global management.

Labour-intensive Jobs

Jobs that require a high level of human labor to produce goods or services, as opposed to automation or machinery.

Ethnocentrism

The belief in the inherent superiority of one's own ethnic group or culture, often accompanied by a tendency to view other cultures from the perspective of one's own.

Globalization Gap

What occurs when large multinational corporations and industrialized nations gain disproportionately from the benefits of globalization.