Question

Delta furnishings received an invoice dated may 10 for a shipment of goods received june 21. The invoice was for a $8400.00 less 33 1/3 % and 12 1/2% with terms 3/20, R.O.G. How much must Delta pay on july 9 to reduce its debt (a) by $2000, (b) to $2000?

Answer 1

The right solution is:

(a) $1,940

(b) $2,813

Explanation:

Given:

Invoice amount

= $8,400

Discount 1

= 33.33%

Discount 2

= 12.5%

So,

The net payable amount will be:

=
`8400* [1 - (100)/(300) ]* [1 - (12.5)/(100) ]`

=
`8400* (2)/(3)* 0.875`

=
`4900` ($)

Now,

(a)

Amount paid will be:

=
`2000* 0.97`

=
`1940` ($)

Balance still to be paid will be:

=
`4900-2000`

=
`2900` ($)

(b)

Amount paid will be:

=
`(4900- 2000)* 0.97`

=
`2900* 0.97`

=
`2813` ($)

Balance still to be paid will be:

=
`2000` ($)

Thus the above solution is the appropriate one.