Question

1.

A company received an invoice for ​$3904.85 dated June 14 with terms 6​/15​, 2​/30, ​n/60.  

​(a) If the invoice is paid on June 20​, how much is to be​ paid? Round the final answer to the nearest cent as needed.

​(b) If the invoice is paid on July 11​, how much is to be​ paid? Round the final answer to the nearest cent as needed.

​(c) If the invoice is paid on August 10​, how much is to be​ paid? Round the final answer to the nearest cent as needed.

2.

What amount will reduce the amount due on an invoice of $2282.53 by $1078.56 if the terms of the invoice are 1​/10​, ​n/45 and the payment was made during the discount​ period? Round the final answer to the nearest cent as needed.

3.

Sandown Appliances received an invoice dated May 16 with terms 3​/10 E.O.M. for the items listed below.

6 refrigerators at ​$950 each less 25​% and 6​%

3 dishwashers at ​$763 each less 1623​%, 12.9​%, and 3​%

​(a)	What is the last day for taking the cash​ discount?
​(b)	What is the amount due if the invoice is paid on the last day for taking the​ discount?
​(c)	What is the amount of the cash discount if a partial payment is made such that a balance of ​$2000 remains outstanding on the​ invoice?

Answer 1

Answer to Question 1.
Part a.
Invoice Amount = $3,904.85

Credit terms 6/15, 2/30, n/60 means 6% discount will be allowed if payment is made within 15 days, 2% discount will be allowed if payment is made within 30 days and the maximum credit period is 60 days.

Payment date = June 20

Discount allowed = 6%, as payment is made within 15 days from Invoice date

Amount to be paid = Invoice amount - Discount
Amount to be paid = $3,904.85 - ($3,904.85 * 6%)
Amount to be paid = $3,670.56

Part b.
Invoice Amount = $3,904.85

Credit terms 6/15, 2/30, n/60 means 6% discount will be allowed if payment is made within 15 days, 2% discount will be allowed if payment is made within 30 days and the maximum credit period is 60 days.

Payment date = July 11

Discount allowed = 2%, as payment is made in a period of more than 15 days but within 30 days from Invoice date

Amount to be paid = Invoice amount - Discount
Amount to be paid = $3,904.85 - ($3,904.85 * 2%)
Amount to be paid = $3,826.75

Part c.

Invoice Amount = $3,904.85

Credit terms 6/15, 2/30, n/60 means 6% discount will be allowed if payment is made within 15 days, 2% discount will be allowed if payment is made within 30 days and the maximum credit period is 60 days.

Payment date = August 10

Discount allowed = 0%, as payment is made after maximum discount period of 30 days

Amount to be paid = Invoice amount - Discount
Amount to be paid = $3,904.85 - $0
Amount to be paid = $3,904.85