Import exclusives Ltd. received an invoice dated June 28 from Dansk Specialties of Copenhagen with terms 5/20, n/45:
100 teak trays at $34.30 each;
25 teak ice buckets at $63.60 each;
40 teak salad bowls at $54.50 each.
All items are subject to trade discounts of 33 1/3%, 7 1/2%, 5%.
a) What is the last day of the discount period?
b) What is the amount due if the invoice is paid in full on July 15?
c) If a partial payment only is made on the last day of the discount period, what amount is due to reduce the outstanding balance to $2500?
I am stuck on the whole question, please help!
us bro us
To solve this problem, we need to follow the given terms and calculate the final amount due for various scenarios. Let's break down each part of the problem step by step:
a) What is the last day of the discount period?
According to the terms provided (5/20, n/45), the first number (5) represents the number of days within which the buyer can avail of a discount, and the second number (20) represents the number of days within which the invoice must be paid in full to avoid any penalties or interest charges.
To find the last day of the discount period, we need to add the discount period (5 days) to the date mentioned on the invoice.
Invoice date: June 28
Discount period: 5 days
To find the last day of the discount period, add 5 days to June 28:
June 28 + 5 days = July 3
Therefore, the last day of the discount period is July 3.
b) What is the amount due if the invoice is paid in full on July 15?
To calculate the amount due if the invoice is paid in full, we need to consider the items' quantities and prices, as well as the trade discounts mentioned.
Given quantities and prices after trade discounts:
- 100 teak trays at $34.30 each (discount: 33 1/3%)
- 25 teak ice buckets at $63.60 each (discount: 7 1/2%)
- 40 teak salad bowls at $54.50 each (discount: 5%)
First, let's calculate the discounted prices for each item:
Discounted price for teak trays:
$34.30 - (33 1/3% of $34.30) = $34.30 - ($34.30 * 33 1/3%) = $34.30 - ($34.30 * 0.3333) = $34.30 - $11.43 = $22.87
Discounted price for teak ice buckets:
$63.60 - (7 1/2% of $63.60) = $63.60 - ($63.60 * 7 1/2%) = $63.60 - ($63.60 * 0.075) = $63.60 - $4.77 = $58.83
Discounted price for teak salad bowls:
$54.50 - (5% of $54.50) = $54.50 - ($54.50 * 5%) = $54.50 - ($54.50 * 0.05) = $54.50 - $2.73 = $51.77
Next, we can calculate the total amount due:
Total amount due = (quantity_1 * price_1) + (quantity_2 * price_2) + (quantity_3 * price_3)
Total amount due = (100 * $22.87) + (25 * $58.83) + (40 * $51.77)
Total amount due = $2,287 + $1,470.75 + $2,070.80
Total amount due = $5,828.55
Therefore, if the invoice is paid in full on July 15, the amount due is $5,828.55.
c) If a partial payment only is made on the last day of the discount period, what amount is due to reduce the outstanding balance to $2500?
To calculate the amount due for a partial payment on the last day of the discount period, we need to subtract the desired outstanding balance ($2500) from the total amount due ($5,828.55).
Amount due to reduce the outstanding balance = Total amount due - Desired outstanding balance
Amount due to reduce the outstanding balance = $5,828.55 - $2,500
Amount due to reduce the outstanding balance = $3,328.55
Therefore, if a partial payment is made on the last day of the discount period, the amount due to reduce the outstanding balance to $2500 is $3,328.55.