City Cellular purchased $28,900 in cell phones on April 25. The terms of sale were 4/20, 3/30, n/60. Freight terms were F.O.B. destination. Returned goods amounted to $650. a. What is the net amount due if City Cellular sends the manufacturer a partial payment of $5,000 on May 20? $ b. What is the net date? Use the full name of the month (e.g., April). c. If the manufacturer charges a 4 % late fee, how much would City Cellular owe if it did not pay the balance by the net date?
a. Well, if City Cellular sends a partial payment of $5,000 on May 20, we need to take that into account. The total amount of the purchase was $28,900, and if we subtract the $5,000, we get $23,900.
b. The net date is determined by the terms of sale. In this case, it is n/60, which means the full amount is due within 60 days from the date of purchase. Since the purchase was made on April 25, we count 60 days from then and we get June 24.
c. If City Cellular doesn't pay the balance by the net date, which is June 24, the manufacturer charges a late fee of 4%. So, we take the $23,900 and add the late fee of 4%, which would be $956. Therefore, City Cellular would owe $23,900 + $956 = $24,856 if they don't pay by the net date.
To calculate the solution, we need to break it down into steps:
a. What is the net amount due if City Cellular sends the manufacturer a partial payment of $5,000 on May 20?
1. Start with the total purchase amount: $28,900.
2. Subtract the amount returned: $28,900 - $650 = $28,250.
3. Subtract the partial payment made on May 20: $28,250 - $5,000 = $23,250.
Therefore, the net amount due is $23,250.
b. What is the net date? Use the full name of the month (e.g., April).
The terms of sale are 4/20, 3/30, n/60.
1. The first number represents the discount percentage.
2. The second number represents the number of days within which the discount is applicable.
3. The third number represents the maximum number of days City Cellular has to pay the net amount due in full.
Given that the discount is 4%, and the number of days to avail the discount is 20, the net date can be calculated as follows:
Starting from the date of purchase, April 25:
April 25 + 20 days = May 15.
Therefore, the net date is May 15.
c. If the manufacturer charges a 4% late fee, how much would City Cellular owe if it did not pay the balance by the net date?
To calculate the late fee amount, we need to find the number of days after the net date until the actual payment date:
May 20 - May 15 = 5 days.
Using this information, we can calculate the late fee:
Late fee = net amount due * late fee percentage = $23,250 * 4% = $930.
Therefore, if City Cellular does not pay the balance by the net date, it would owe an additional $930 in the form of a late fee.
a. To calculate the net amount due, we need to subtract the partial payment from the total purchase amount.
First, let's calculate the total purchase amount after deducting the returned goods:
Total purchase amount = $28,900 - $650 = $28,250.
Now, let's subtract the partial payment of $5,000 from the total purchase amount:
Net amount due = $28,250 - $5,000 = $23,250.
Therefore, the net amount due if City Cellular sends the manufacturer a partial payment of $5,000 on May 20 is $23,250.
b. To find the net date, we need to determine the number of days after the invoice date that the payment is due.
The terms of sale are given as 4/20, 3/30, n/60. This means that if the invoice date is April 25, the net date will be 20 days after the invoice date.
To find the net date, we start counting from April 25 and add 20 days:
April 25 + 20 days = May 15.
Therefore, the net date is May 15.
c. If the manufacturer charges a 4% late fee, we can calculate the amount City Cellular would owe if it did not pay the balance by the net date.
To find the late fee, we calculate 4% of the net amount due:
Late fee = 4% of $23,250 = (4/100) * $23,250 = $930.
Therefore, if City Cellular did not pay the balance by the net date, they would owe an additional $930 in late fees.