Question

Johnson company purchased merchandise with an invoice cost of $90,000. the vendor's terms offered a 4% discount on any part of the invoice paid within 10 days. johnson company made a cash payment of $48,000 within the 10 days. how much did johnson company still owe after making the payment?

Answer 1

Johnson company still owes $40,320 after making the payment.

Step-by-step explanation:

The question asks how much the Johnson company still owes after making a cash payment with a vendor discount applied. The invoice cost was $90,000, and a 4% discount was available on payments made within 10 days.

Johnson company purchased merchandise with an invoice cost of $90,000. The vendor's terms offered a 4% discount on any part of the invoice paid within 10 days. Johnson company made a cash payment of $48,000 within the 10 days. To calculate the amount Johnson company still owes after making the payment, we can subtract the payment from the invoice cost and then apply the discount.

Amount owed after payment: $90,000 - $48,000 = $42,000

Discount amount: $42,000 * 0.04 = $1,680

Amount owed after applying the discount: $42,000 - $1,680 = $40,320