1) Problem:
Isaac Co. sells merchandise on credit to Sonar Co in the amount of $9,600. The invoice is dated on April 15 with terms of 1/15, net 45. What is the amount of the discount and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?

Answer: $96, April 30

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2) Problem:
Bright Co. holds Park Co.'s $20,000, 120 day, 9% note. The entry made by Bright Co. when the note is collected, assuming no interest has previously been accrued is:

Answer:
DR Cash $41,200
CR Notes Receivable $40,000
CR Interest Revenue $1,200

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3) Problem:
Using the perpetual system, costing by the last-in, first-out method, what is the cost of the merchandise inventory of 30 units on September 30?

Answer: $650

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