Ned’s Sheds purchases building materials from Timbertown Lumber for $3,700 with terms of 4/15, n/30. The invoice is dated October 17. Ned’s decides to send in a $2,000 partial payment. By what date must the partial payment be sent to take advantage of the cash discount? (Points : 2.5)
10. Considering the scenario from the previous question, if partial payment was sent by the discount date, what is the balance still due on the order? (Points : 2.5)
To determine the date by which the partial payment must be sent to take advantage of the cash discount, we need to understand the terms given: 4/15, n/30.
The term "4/15" means that a discount of 4% is offered if payment is made within 15 days. The term "n/30" means that the balance is due in full within 30 days.
To calculate the discount date, you add the number of days mentioned in the discount terms to the invoice date. In this case, the invoice date is on October 17.
So, if we add 15 days to October 17, we get October 32. However, October 32 is not a valid date, so we proceed to the next month. Therefore, the discount date is November 1.
Therefore, the partial payment must be sent by November 1 to take advantage of the cash discount.
Now, let's calculate the balance still due on the order if a partial payment of $2,000 was sent by the discount date.
The total invoice amount is $3,700. If a partial payment of $2,000 is sent, the remaining balance is calculated by subtracting the partial payment from the total invoice amount.
$3,700 - $2,000 = $1,700
So, the balance still due on the order, if a partial payment of $2,000 was sent by the discount date, is $1,700.