Question

on april 6, home furnishings purchased $35,000 of merchandise from unas imports, terms 3/10, n/45. on april 8, home furnishings returned $7,400 of the merchandise to unas imports for credit. home furnishings paid cash for the merchandise on april 15. required: a. what is the amount that home furnishings must pay unas imports on april 15? b. use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. more specifically, record the amounts of the events into the model. also, in the statement of cash flows column, classify the cash flows as operating activities (oa), investing activities (ia), or financing activities (fa). c. how much must home furnishings pay for the merchandise purchased if the payment is not made until april 20? d. record the payment for the merchandise in requirement (c) in the horizontal financial statements model. also, in the statement of cash flows column, classify the cash flows as operating activities (oa), investing activities (ia), or financing activities (fa) complete this question by entering your answers in the tabs below. required a required b required c required d use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. more specifically, record the amounts of the events into the model. also, in the statement of cash flows column, classify the cash flows as operating activities (oa), investing activities (ia), or financing activities (fa). note: enter any decreases to account balances and cash outflows with a minus sign. leave cells blank if no input is needed.

Explanation:

Step1: Calculate net purchase amount

The initial purchase was $35,000 and the return was $7,400. So the net - purchase amount is $35000 - 7400=27600$.

Step2: Apply discount terms

The terms are 3/10, n/45. Since the payment is made on April 15 (within 10 days of the purchase), a 3% discount is applicable. The amount to be paid is $27600\times(1 - 0.03)=27600\times0.97 = 26772$.

Answer:

a. $26,772
b.

Events	Assets	Liabilities	Stockholders' Equity	Revenue	Expenses	Net	Statement of Cash Flows
Return on April 8	Inventory - 7400<br>Accounts Payable - 7400	Accounts Payable - 7400
Payment on April 15	Cash - 26772<br>Inventory - 828<br>Accounts Payable - 27600	Accounts Payable - 27600					Operating Activities (OA) - 26772

c. If payment is made on April 20 (after the discount period), the amount to be paid is the net - purchase amount of $27,600.

Events	Assets	Liabilities	Stockholders' Equity	Revenue	Expenses	Net	Statement of Cash Flows
Return on April 8	Inventory - 7400<br>Accounts Payable - 7400	Accounts Payable - 7400
Payment on April 20	Cash - 27600<br>Accounts Payable - 27600	Accounts Payable - 27600					Operating Activities (OA) - 27600

d. The recording for the payment on April 20 in the horizontal financial statements model is shown above in part c. The cash flow is classified as an operating activity (OA) as it relates to the normal business operations of purchasing and paying for merchandise.