Sansomite Co. distributes suitcases to retail stores and extends credit terms of 1/10, n/30 to all of its customers. At the end of June, Sansomite's inventory consisted of suitcases costing $1,200
During the month of July the following merchandising transactions occurred:

July 1 Purchased suitcases on account for $1,800 from Trunk Manufacturers, FOB destination, terms 2/10, n/30. The appropriate party also made a cash payment of $100 for freight on this date.

July 3 Sold suitcases on account to Satchel World for $2,000 The cost of suitcases sold is
$1,200

July 9 Paid Trunk Manufacturers in full.

July 12 Received payment in full from Satchel World.


How do I post July 12 Transaction?

What does 1/10,2/10,n/30,FOB,mean?

Credit sales is shown in sales book then posted to ledger.

You use perpetual inventory system so please tell number of units... of suitcases.

What method is used by you LIFO,FIFO,weighted average method?

The 12 July entry will nullify the 3 July entry...

It didn't tell me how many units so I'm guessing is only 1 unit.
The 1/10 is if he paid in 10 days they will gat 1% discount, 2/10 if they pay in the first 10 days they gey 2% discount , n/30 is the term to pay back without interest.

OK they paid in 9 days so they get 2% discount...

Yes they get 2% discount, but I would like to know how would I post the July 12, transaction.

The July 9 transaction I posted like this:
Accounts Payable 1,700.00
Sales Discounts 34.00
Cash 1,666.00

Did I did it correct?

July 3 credit sales 2000 July 12 discount allowed 40 July 12 cash received 1960... hopefully that helped... rep me if it did.