Final answer:
The sale terms '2/10, n/30 FOB San Diego' mean that Long can avail a discount of 2% if they pay within 10 days, or they need to pay the full amount within 30 days. Including the $35 freight prepayment, Long would pay Jones $5,915 if they pay within the discount period, and $6,035 if they pay after the discount period.
Step-by-step explanation:
The sale terms mentioned in the question refer to the discount and credit policy offered by Jones to Long. The terms '2/10, n/30' mean that if Long pays the invoice within 10 days, they can enjoy a 2% discount. Otherwise, they need to pay the full amount within 30 days. The FOB San Diego indicates that the ownership and responsibility for the goods transfer to Long at that location.
Long agreed to prepay the $35 freight. Therefore, the amount Long pays Jones will depend on whether they avail the discount or not. Let's calculate both scenarios:
- If Long pays within the discount period, they can deduct 2% from the $6,000 list price. So, the discounted amount would be $6,000 - (2% of $6,000).
- If Long pays after the discount period, they have to pay the full amount of $6,000.
In both cases, we need to add the $35 prepayment for freight to the total amount.
Calculations:
- In the first scenario, the discounted amount would be $6,000 - (0.02 x $6,000) = $5,880. Adding the $35 prepayment, Long would pay Jones a total of $5,915.
- In the second scenario, Long would pay the full $6,000. Adding the $35 prepayment, Long would pay Jones a total of $6,035.
Therefore, Long would pay Jones $5,915 if they pay within the discount period, and $6,035 if they pay after the discount period.