Calculate the cash discount and the net amount due for the following transaction.
Amount of
Invoice Terms of
Sale Cash
Discount Net
Amount Due
$12,660.00 2/10, n/45
To calculate the cash discount and the net amount due for the given transaction, follow these steps:
Step 1: Determine the cash discount rate:
The terms of sale indicate "2/10, n/45", which means a 2% cash discount is offered if payment is made within 10 days.
Step 2: Calculate the cash discount amount:
To calculate the cash discount amount, we multiply the invoice amount by the cash discount rate:
Cash discount = Invoice amount x Cash discount rate
= $12,660.00 x 0.02
= $253.20
Step 3: Calculate the net amount due:
The net amount due is the invoice amount minus the cash discount amount:
Net amount due = Invoice amount - Cash discount
= $12,660.00 - $253.20
= $12,406.80
Therefore, the cash discount for this transaction is $253.20, and the net amount due is $12,406.80.
To calculate the cash discount and the net amount due for the transaction, we need to understand the terms of sale.
The terms of sale provided in the question are "2/10, n/45." This is a common notation used to specify the payment terms. Here's how to interpret it:
2/10: It means that a 2% cash discount will be given if the invoice is paid within 10 days of the invoice date.
n/45: It means that the net amount is due within 45 days of the invoice date.
Now, let's calculate the cash discount and the net amount due:
Step 1: Calculate the cash discount amount:
Cash Discount = Invoice Amount x Cash Discount Percentage
Cash Discount = $12,660.00 x 2% = $253.20
Step 2: Calculate the net amount due:
Net Amount Due = Invoice Amount - Cash Discount
Net Amount Due = $12,660.00 - $253.20 = $12,406.80
Therefore, in this transaction:
- The cash discount is $253.20.
- The net amount due is $12,406.80.