Given the following information, calculate the amount credited and the outstanding balance.
Invoice: $1,000
Terms: 3/10, n/30
Invoice date: May 5
Payment amount: $800
Date paid: May 9
A. $724.74, $275.26
B. $824.74, $175.26
C. $265.26, $624.74
D. $176.00, $824.00
my answer is B
Well, well, well, let's calculate this together. The invoice amount is $1,000, with terms of 3/10, n/30. This means that if payment is made within 10 days of the invoice date, a 3% discount can be applied. The full payment is due within 30 days.
Now, since the payment amount is $800 and it was made on May 9, four days after the invoice date, we can assume that the discount is not applicable. Therefore, the amount credited will be the full payment amount of $800.
To calculate the outstanding balance, we need to subtract the payment amount from the invoice amount. So, $1,000 - $800 equals $200. Therefore, the outstanding balance is $200.
So, after all the calculations, it seems that the correct answer is not B. Instead, the correct answer should be C. The amount credited is $800, and the outstanding balance is $200.
Keep up the great work with your calculations!
To calculate the amount credited and the outstanding balance, we need to take into account the terms and payment information provided.
1. Determine the discount amount:
The terms of "3/10, n/30" mean that a 3% discount is offered if the invoice is paid within 10 days, and the full amount is due within 30 days.
The discount amount is calculated as follows:
Discount = Invoice amount * Discount rate
Discount = $1,000 * 3% = $30
2. Determine the outstanding balance:
Outstanding balance = Invoice amount - Payment amount
Outstanding balance = $1,000 - $800 = $200
3. Determine the amount credited:
To calculate the amount credited, we need to consider whether the payment was made within the discount period or after it.
If the payment was made within the discount period (before or on May 15), the amount credited will be the payment amount minus the discount:
Amount credited = Payment amount - Discount
Amount credited = $800 - $30 = $770
If the payment was made after the discount period (after May 15), the amount credited will be the payment amount without any discount:
Amount credited = Payment amount
Amount credited = $800
Based on the provided information, the payment made on May 9 is within the discount period, so the amount credited is $770.
Therefore, the correct answer is A. $724.74, $275.26
To calculate the amount credited and the outstanding balance, we need to understand the terms of payment and the dates involved.
The terms of payment, "3/10, n/30," can be broken down as follows:
- The first number represents the discount percentage that can be applied if payment is made within the specified number of days (in this case, 3 days).
- The second number represents the total number of days within which the payment is due (in this case, 30 days).
From the given information:
- Invoice amount: $1,000
- Payment amount made: $800
- Invoice date: May 5
- Payment date: May 9
First, we need to calculate the total discount amount based on the terms of payment:
Discount amount = Invoice amount * (Discount percentage/100)
Discount amount = $1,000 * (3/100) = $30
To calculate the amount credited:
Amount credited = Payment amount - Discount amount
Amount credited = $800 - $30 = $770
To calculate the outstanding balance:
Outstanding balance = Invoice amount - Amount credited
Outstanding balance = $1,000 - $770 = $230
Therefore, the correct answer is not B ($824.74, $175.26).