Question

Scarlet Company received an invoice for $65,000.00 that had payment terms of 4/5 n/30. If it made a partial payment of $14,100.00 during the discount period, calculate the balance of the invoice.

Answer 1

The remaining balance of the invoice after Scarlet Company's discounted partial payment of $14,100 is $51,464.

Step-by-step explanation:

The student's question pertains to an invoice with payment terms that offer a discount for early payment. The payment terms are 4/5 n/30, which implies a 4% discount if the payment is made within 5 days, otherwise, the net (full) amount is due within 30 days. Since Scarlet Company made a partial payment of $14,100 during the discount period, we must first calculate the discount amount and then determine the remaining balance on the invoice.

The discount is calculated as 4% of the partial payment: $14,100 * 4% = $564. Subtracting the discount from the partial payment gives the amount credited to the invoice: $14,100 - $564 = $13,536.

Next, we subtract the credited amount from the original invoice to find the remaining balance: $65,000 - $13,536 = $51,464. Therefore, after making the discounted partial payment, Scarlet Company has a remaining balance of $51,464 on the invoice.