Exam 7: Discounts: Trade and Cash

An invoice dated March 12 in the amount of $50,000 is received by Reliance Corporation on March 16. Cash discount terms on the invoice are 3/10, n/30. On March 16 Reliance mails a check in the amount of $8,000 as partial payment on the invoice. The outstanding balance owed on the invoice is:

Net price plus amount of trade discount equals list price.

The net price equivalent rate of 10/20/5 is .684.

The net price equivalent rate should be rounded to the nearest hundredth.

2/10, n/30 means the credit period is 30 days from the end of the discount period.

Calculate the list price based on the information given below.

50 days from July 9 is August 28.

Black & Decker Manufacturing sold a set of saws to True Value Hardware. The list price was $3,800. Black & Decker offered a chain discount of 8/3/1. The net price of the saws is:

A cash discount sometimes is taken on the amount of trade discount.

The net price equivalent rate of 9/15/18 is:

2/10, EOM means that the cash discount period ends on the tenth day of the month that follows the sale.

Which month has 30 days?

Ed's Print Shop received an invoice dated May 10 for $2,500 with terms 3/10, 1/15, n/60. On May 22, Ed's Print Shop sent a partial payment of $2,000. What is the actual amount that should be credited, and what is Ed's Print Shop's outstanding balance? Amount credited: $2,020.20; Outstanding balance: $479.80

A local RadioShack store wants to buy a new line of plasma TVs. Manufacturer A offers chain discounts of 18/12, and Manufacturer B offers terms of 17/13. Which single equivalent discount rate is the best deal?

FOB shipping point means the seller pays cost of freight.

The single equivalent discount rate of the trade discount 5/4/1 is:

3/10, 1/15, n/30 means that a 3% cash discount is available from day 11 to day 15.

FOB shipping point means:

Goods sold after the 25^th of the month with terms of 2/10, EOM results in the discount period being extended 10 days longer.

Buffy Rich wants to buy a new line of stereos for her shop. Manufacturer A offers trade discounts of 20/14, and Manufacturer B offers trade discounts of 25/7. Assuming both manufacturers have the same list price, which manufacturer should Buffy buy from? Buffy should buy from Manufacturer A.