Determine the amount to be paid in full settlement of each of the following invoices, assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period.
To determine the amount to be paid in full settlement of each invoice, you will need to consider the discount terms and any returns or allowances that have been credited.
1. Start by looking at the invoice amount. This is the full amount charged for the goods or services provided.
2. Next, calculate any returns or allowances that have been credited. Subtract the amount credited from the invoice amount. This will give you the net amount payable.
3. Now, check the discount terms stated on the invoice. These terms usually specify a discount percentage and a discount period, which is the time frame within which the discount can be taken.
4. If the payment is made within the discount period, the discount can be applied to the net amount payable. Multiply the net amount payable by the discount percentage to calculate the discount amount.
5. Finally, subtract the discount amount from the net amount payable to determine the amount to be paid in full settlement of the invoice.
Remember to repeat this process for each invoice separately, as the discount terms and credited returns or allowances may vary for each one.