An invoice for a camcorder that cost $1210 is dated August 2, with sales terms of 4/10 EOM. If the bill is paid on September 5, how much is due for the net amount due?
1210
To calculate the net amount due on an invoice, we need to consider the sales terms. In this case, the sales terms are 4/10 EOM, which stands for "4% discount if paid within 10 days, end of month."
Here's how you can calculate the net amount due:
1. Start by determining the payment due date. Since the invoice is dated August 2, we count 10 days from the end of the month. Therefore, the payment due date is the last day of August, which is August 31.
2. Calculate the discount period. The discount period is the number of days within which the payment must be made to qualify for the discount. In this case, the discount period is 10 days.
3. Determine the regular payment period. The regular payment period is the number of days within which the payment must be made in full, without any discount. In this case, the regular payment period is from the end of the discount period (August 31) until the actual payment date (September 5).
4. Calculate the amount for the net amount due:
- Determine the discounted amount by multiplying the total cost of the camcorder by the discount rate. In this case, the discount rate is 4%, so the discounted amount is 0.04 multiplied by $1210: 0.04 * $1210 = $48.40.
- Calculate the regular payment amount by subtracting the discount from the total cost. In this case, the regular payment amount is $1210 - $48.40 = $1161.60.
Therefore, the net amount due for the camcorder, if paid on September 5, is $1161.60.