I DO NOT understand this at all and I worked on it and came up with answers but they were wrong??
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?
If partial payment was sent by the discount date, what is the balance still due on the order?
To find the date by which the partial payment must be sent to take advantage of the cash discount, we need to understand the terms of payment provided in the question.
In this case, the terms are given as 4/15, n/30. This means that Ned's Sheds gets a cash discount of 4% if the payment is made within 15 days. If the payment is not made within this period, the full amount is due within 30 days.
To determine the discount date, we start counting from the invoice date, which is October 17. We add the number of days specified in the terms, in this case, 15 days.
Therefore, the discount date can be calculated as October 17 + 15 days = November 1.
Now, to find the balance still due on the order if a partial payment of $2,000 is sent by the discount date, we need to subtract the partial payment from the total purchase amount.
The total purchase amount is $3,700, and the partial payment is $2,000.
Therefore, the balance still due on the order if the partial payment is sent by the discount date is $3,700 - $2,000 = $1,700.
So, the partial payment must be sent by November 1 to take advantage of the cash discount, and the balance still due on the order would be $1,700.