Assume that the credit memorandum was received prior to

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Reference no: EM13599066

Details of a purchase invoice and related credit memorandum are summarized as follows:

Invoice: Cost of merchandise listed on purchase invoice $5,500

Prepaid transportation charge added to invoice 100

Terms, FOB shipping point, 1/10, n/eom

Credit memo: Cost of merchandise returned $1,500

Assume that the credit memorandum 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.

Be sure to label each answer clearly and show all work. If work is not show full credit will NOT be awarded for this problem.

Reference no: EM13599066

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