Question

Majestic manufacturing sold Jordans Furniture a living room set for an $8,640 list price with a 35% trade discount. The $170 freight (FOB shipping point) was not part of the list price. The terms were 4/10, n/30 ROG. The invoice date was June 13. Jordans received the goods on August 01 and paid the invoice on August 03. What was the final price (including the cost of freight) of the living room set?

Answer 1

To calculate the final price, take the list price after the trade discount, add the freight cost, and apply the payment terms. The final price, including freight, is $5,548.64.

Step-by-step explanation:

To calculate the final price of the living room set, we need to consider the trade discount, freight cost, and the terms of payment. First, let's calculate the trade discount: 35% of $8,640 = $3,024. The list price after the trade discount is $8,640 - $3,024 = $5,616.

Next, we need to add the freight cost of $170 to the list price after the discount: $5,616 + $170 = $5,786.

Now, let's apply the terms of payment. The terms are 4/10, n/30 ROG, which means the buyer will get a 4% discount if they pay within 10 days, otherwise, the full amount is due within 30 days. Since Jordans paid on August 03, which is within 10 days of the invoice date, they qualify for the 4% discount.

The final price, including the cost of freight, is $5,786 - (4% of $5,786) = $5,548.64.