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Homework answers / question archive / Long Company purchased goods from Griffin with the following terms and details
Long Company purchased goods from Griffin with the following terms and details.
Sales price, $7,000
Terms, (3/10, n/30)
Date of sale, March 7
Date of payment, March 19
Shipping, FOB Shipping Point, $245, prepaid by seller
Determine if Long, the buyer, qualifies for a cash discount, and who pays for shipping, Long or Griffin.
Does the buyer, Long, qualify for the discount?
Yes
No
Who pays for shipping?
Long, the buyer
Griffin, the seller
Long company does not qualifies for discount because the term of discount is 1/10 it means 1% discount will be allowed if the payment by the buyer is made within 10 days. But Jones company purchased good on March 7 and payment was made on March 19. So Jones company does not qualify for discount.
Long, the buyer pays for shipping. In common practice also always the buyer pays shipping.
