Question

Please explain what math was done to get 300 and 400. Also explain how they got 8,820 and 180 please. I circled the parts I'm confused about. Thanks!

Dec 10 Dec 11 Dec 12 Dec 19 Carrington Company purchased $10,000 of merchandise from Dansit Company FOB shipping point, terms 2/10, n/30 (cost of goods is $4,000) Carrington pays the freight costs of $200 Damaged goods totaling $1,000 are returned to Dansit for credit; the scrap value of these goods is $100 Carrington pays Dansit Company in full, less the purchase discount Carrington Enterprises — Buyer Dansit Company — Seller Dr Cr Dr cr 12/10 10,000 MI A/P—Dansit Company 12/10 10,000 10,000 A/R-Carrington Enterprises Sales COGS MI 10,000 4,000 4,000 12/11 200 12/11 MI Cash 200 NOTHING, as carrier can't collect twice for freight charges 12/12 1,000 A/P—Dansit Company MI 12/12 1,000 1,000 1,000 Sales Returns & Allowances A/R-Carrington Enterprises MI Loss from Damaged Merchandise COGS 100 300 400 12/19 9,000 12/19 A/P—Dansit Company MI Cash Cash Sales Discounts A/R-Carrington Enterprises 8,820 180 180 8,820 9,000

Answer 1

Since Cost of Goods Sold for 10000 sale was 4000, so for 1000 sale return, cost of goods sold is 400 i.e 4000/10000 x 1000
Moreover it has scrap value of 100, so loss is 400 -100 = 300

If payment is made within 10 days, there is discount of 2% i.e. 9000 x 2% = 180
Cash = 9000 - 180 = 8820 i.e. cash received net of discount