Question

Maplewood Supply received a $5,380 invoice dated 4/5/10. The $5,380 included $380 freight. Terms were 2/10, 1/30, 1/60 a. If Maplewood pays the invoice on April 27, what will it pay? Payable amount b. If Maplewood pays the invoice on May 21, what will it Payable amount

Answer 1

Invoice of $5,380 includes $380 freight. Discount is not allowed on freight amount.

Cost of goods purchased = 5,380-380

= $5,000

Date of purchase = April 15

Purchase terms = 2/10, 1/30, n/60

payment date = April 27

a.

Since payment is made after 10 days but before 30 days of purchase, hence 1% discount will be allowed.

Discount = Cost of goods purchased x Discount rate

= 5,000 x 1%

= $50

Payable amount = Invoice amount- Discount

= 5,380-50

= $5,330

Payable amount

$5,330

b.

Payment date = May 21

Since payment is made after 30 days , hence no discount will be allowed.

Payable amount = Invoice amount

= $5,380

Payable amount

$5,380

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