Question

According to a June 12 invoice, George's Grocery Store owes $11,250 to Crane Food Services. The sales terms are 5/10, 3/15, n/30. Find the cash discount if the invoice is

paid on June 26.
$328.75
$337.50
$445.80
$562.50
None of these choices are correct.

Answer 1

$337.50

Explanation:

Given that

The amount is $11,250

And, the sales terms are 5/10, 3/15, n/30

5/10 means if the payment is done within 10 days so 5% discount is given

3/15 means if the payment is done within 15 days so 3% discount is given

And, n/30 means the credit days for payment allowed is 30

Now the cash discount if the invoice is paid on June 20 is

= $11,250 × 3%

= $337.50