1. Ned’s Sheds purchases building materials from Timbertown Lumber for $3,700 with terms of 4/15, n/30. The invoice is dated October 17. Ned’s decides to send in a $2,000 partial payment. By what date must the partial payment be sent to take advantage of the cash discount?
Considering the scenario from the previous question, if partial payment was sent by the discount date, what is the balance still due on the order?
please answer the question in detail so I can see where the answer came from. Thank you
1,700
i dont understand
To determine the date by which Ned's Sheds must send the partial payment to take advantage of the cash discount, we need to understand the terms mentioned in the invoice.
The terms "4/15, n/30" indicate that a cash discount of 4% is available if payment is made within 15 days of the invoice date (meaning the discount period). Otherwise, the full payment is due within 30 days (meaning the net due date).
In this scenario, the invoice is dated October 17, so we need to calculate the cash discount period and the net due date.
First, we find the cash discount period by subtracting the discount days (15) from the invoice date:
October 17 + 15 days = November 1
Therefore, the partial payment must be sent by November 1 to take advantage of the cash discount.
Next, to determine the balance still due on the order if partial payment is sent by the discount date, we need to subtract the partial payment amount ($2,000) from the total purchase cost ($3,700).
Balance Due = Total Purchase Cost - Partial Payment
Balance Due = $3,700 - $2,000
Balance Due = $1,700
Therefore, if Ned's Sheds sends a partial payment of $2,000 by November 1, the remaining balance due on the order will be $1,700.