Ace Formalwear buys tuxedos from a supplier and has an invoice amount of $27,700. The terms of the sale are 3/20, n/30. If Ace sends a partial payment of $7,400 on the discount date, what is the net amount still due?
To calculate the net amount still due, we need to understand the terms of the sale and the partial payment made by Ace Formalwear.
The terms of the sale, 3/20, n/30, can be interpreted as follows:
- 3/20: This means that if Ace Formalwear pays the invoice within 20 days, they will be eligible for a cash discount of 3%.
- n/30: This means that the total amount is due within 30 days.
Therefore, if Ace Formalwear pays within 20 days, they can deduct a 3% cash discount from the invoice amount of $27,700.
To calculate the discount, we multiply the invoice amount by the discount rate: $27,700 * 3% = $831.
Now, let's calculate the remaining balance after the partial payment of $7,400.
Subtract the partial payment and the discount from the invoice amount: $27,700 - $7,400 - $831 = $19,469.
Therefore, the net amount still due to the supplier is $19,469.