Morgan company received from Lee Company an invoice dated September 27. Terms were 2/10 EOM. List price on the invoice was $5000(freight not included). Morgan recievves a 9/7 chain discount. Frieght charges are Morgan's responsibility but Lee agreed to prepay the $150 freight charge. Morgan pays the invoice November 9. What does Morgan pay Lee?

To calculate the amount that Morgan pays Lee, we need to consider the terms, discounts, and freight charges.

Step 1: Calculate the payment due date
Since the terms are "2/10 EOM," we need to determine the end of the month following the invoice date (September). This would be October. Therefore, the payment due date would be October 31.

Step 2: Calculate the chain discount
The chain discount is stated as 9/7. This means that there are a series of two discounts applied successively. Let's calculate it:
First Discount = 9% of $5000 = $450
Amount after the first discount = $5000 - $450 = $4550
Second Discount = 7% of $4550 = $318.50
Amount after the second discount = $4550 - $318.50 = $4231.50

Step 3: Add the freight charges
Lee agreed to prepay the freight charge of $150. So, we need to add this to the total amount after discounts: $4231.50 + $150 = $4381.50

Step 4: Calculate the late payment penalty (if applicable)
Since Morgan pays the invoice on November 9 (after the due date of October 31), we need to check if there is any late payment penalty. If there is, it needs to be added to the total amount.

Step 5: Determine the final payment amount
Considering that there is no information provided regarding a late payment penalty, Morgan would need to pay the original invoice amount after the discount and including the prepaid freight charge. Therefore, Morgan would need to pay Lee a total of $4381.50.