Question 1

A second hand furniture store buys sofas with a list price of $9,500. If the wholesaler offers trade discounts of 10/20/30, find the single equivalent discount.

Accepted Answer

The single equivalent discount can be calculated by multiplying the complements of each discount rate: $1 - 0.10 = 0.90$, $1 - 0.20 = 0.80$, and $1 - 0.30 = 0.70$. Multiplying these together gives $0.90 \times 0.80 \times 0.70 = 0.504$. The single equivalent discount is $1 - 0.504 = 0.496$.

Question 2

Backyard World buys plastic pools from a supplier with an invoice amount of $19,500. The terms of the sale are 5/10, n/30. If the retailer sends a partial payment of $8,700 on the discount date, what is the net amount still due?

Accepted Answer

The discount is 5% of $8,700, which is $435. So, the payment is $8,700 - $435 = $8,265. The original invoice is $19,500, so the net amount still due is $19,500 - $8,265 = $11,235. However, since the payment took advantage of the discount, the correct calculation for the remaining balance should consider the discount on the entire invoice if paid within the discount period. The correct approach is to calculate the discount on the full invoice amount first, then subtract the partial payment made. The discount on the full invoice is 5% of $19,500, which is $975. Therefore, the discounted invoice amount is $19,500 - $975 = $18,525. After the partial payment of $8,700, the net amount still due is $18,525 - $8,700 = $9,825. My initial explanation contained a calculation error; the correct calculation should directly address the discount terms and the partial payment without incorrectly subtracting the discount from the partial payment alone.

Question 3

Hard Blues Music buys CDs with a list price of $32,000. If the wholesaler offers trade discounts of 3/2/1, find the net price factor.

Accepted Answer

The net price factor is found by subtracting each trade discount from 1 and then multiplying the results. For a 3/2/1 discount, it's calculated as (1 - 0.03) * (1 - 0.02) * (1 - 0.01) = 0.97 * 0.98 * 0.99 = 0.94109.

Question 4

A farm feed supply firm buys feed with an invoice date of April 19. The terms of sale are 3/15, n/30. Find the discount date.

Accepted Answer

The answer of A farm feed supply firm buys feed...

Question 5

A small retailer buys goods from a vendor with an invoice amount of $9,100. The terms of the sale are 2/10, n/30. What is the net amount due on the goods if the bill is paid by the 10th day?

Accepted Answer

The terms 2/10, n/30 mean that the buyer can take a 2% discount if the invoice is paid within 10 days. Therefore, the discount is $9,100 * 2% = $182. The net amount due after the discount is $9,100 - $182 = $8,918.

Question 6

Lulu's Bath Works purchases towels with an invoice price of $12,456, and terms of sale of 5/10, n/30. What is the net amount due on the order if a partial payment of $2,500 is made on the 10th day?

Accepted Answer

The discount is 5% if paid within 10 days. The total discount on $12,456 is $622.80, making the discounted price $11,833.20. After a partial payment of $2,500, the remaining balance is $9,333.20.

Question 7

Conan purchases chocolate having an invoice price of $23,700. The terms of sale are 20/11, n/30. What is the cash discount if the bill is paid by the 10th day?

Accepted Answer

The cash discount is calculated as 20% of the invoice price because the terms 20/11, n/30 mean a 20% discount is available if paid within 11 days. So, $23,700 * 20% = $4,740.

Question 8

Find the net date for an invoice dated August 7, with terms 4/20, 50 Extra.

Accepted Answer

The answer of Find the net date for an invoice...

Question 9

Vivian's Linens purchases towels with an invoice price of $22,700, and terms of sale of 4/10, n/30. What is the net amount due on the order if a partial payment of $10,300 is made on the 10th day?

Accepted Answer

The net amount due is calculated by first applying the discount for early payment. With a 4% discount on $22,700, the discount amount is $22,700 * 0.04 = $908. Subtracting the discount from the invoice price gives $22,700 - $908 = $21,792. After making a partial payment of $10,300 on the 10th day, the remaining balance is $21,792 - $10,300 = $11,492. However, due to a calculation oversight, the correct process was described but the final calculation provided does not match the options given, indicating a mistake in the final step of calculation or a misunderstanding in the options provided. The correct approach involves applying the discount and subtracting the partial payment, but the final answer should be recalculated based on accurate arithmetic.

Question 10

Amado purchased the following: 15 mouse traps @ $1.25 per item, 18 light bulbs @ $3.50 per item and 3 Bird Feeders @ $19.75. The shipping charges were $52.00. What was the total invoice charge?

Accepted Answer

The total invoice charge is calculated by adding the cost of all items plus the shipping charges. For mouse traps: 15 * $1.25 = $18.75. For light bulbs: 18 * $3.50 = $63.00. For bird feeders: 3 * $19.75 = $59.25. Adding these amounts gives $18.75 + $63.00 + $59.25 = $141.00. Adding the shipping charges of $52.00 results in a total of $141.00 + $52.00 = $193.00.

Question 11

Kiddie Kites buys Japanese kite kits with a list price of $6,500. If the supplier offers trade discounts of 30/15/15, find the trade discount amount to the nearest cent.

Accepted Answer

The answer of Kiddie Kites buys Japanese kite kits with...

Question 12

A discount clothing store buys shirts and slacks with a list price of $12,750. If the wholesaler offers trade discounts of 15/25/15, find the single equivalent discount.

Accepted Answer

The single equivalent discount can be found by subtracting the product of the individual discounts from 1. The individual discounts are 15%, 25%, and 15%. First, convert these percentages to decimals: 0.15, 0.25, and 0.15. Then, calculate the product of their complements: (1 - 0.15) * (1 - 0.25) * (1 - 0.15) = 0.85 * 0.75 * 0.85 = 0.541875. The single equivalent discount is 1 - 0.541875 = 0.458125.

Question 13

Modern Video buys Blu-ray discs with an invoice price of $30,200, and terms of sale of 2/15, n/30. What is the net amount due on the order if the bill is paid by the 10th day?

Accepted Answer

The answer of Modern Video buys Blu-ray discs with an...

Question 14

Find the trade discount amount for an order of merchandise with a list price of $25,000 less trade discounts of 30/25/10.

Accepted Answer

To find the trade discount amount, apply each discount sequentially to the remaining balance. First, apply 30% to $25,000, leaving $17,500. Then, apply 25% to $17,500, leaving $13,125. Finally, apply 10% to $13,125, leaving $11,812.50. The total discount is $25,000 - $11,812.50 = $13,187.50.

Question 15

Quick Depot buys tools from a supplier with an invoice amount of $19,700. The terms of the sale are 15/15, n/30. What is the net amount due on the order if the bill is paid by the 15th day?

Accepted Answer

The answer of Quick Depot buys tools from a supplier...

Question 16

Atlas Hardware buys power tools with a list price of $29,500. If the supplier offers trade discounts of 10/20/5, find the trade discount amount. Use the single equivalent discount for your answer.

Accepted Answer

The single equivalent discount can be calculated by finding the complement of each discount (1 - discount rate) and then multiplying these complements together. For the given discounts of 10%, 20%, and 5%, the complements are 0.9, 0.8, and 0.95, respectively. Multiplying these together gives a single equivalent discount complement of 0.684. Subtracting this from 1 gives a single equivalent discount rate of 0.316 or 31.6%. Applying this to the list price of $29,500 results in a trade discount amount of $29,500 * 0.316 = $9,322.

Question 17

Find the trade discount amount for an order of paper supplies with a list price of $25,000, less trade discounts of 30/20/10. Use the single equivalent discount for your answer.

Accepted Answer

The single equivalent discount is calculated by multiplying the complements of the discounts: (1 - 0.30) * (1 - 0.20) * (1 - 0.10) = 0.504. The equivalent discount rate is 1 - 0.504 = 0.496. The trade discount amount is $25,000 * 0.496 = $12,400.

Question 18

Standard Software purchases programs from Microsoft with an invoice price of $25,900 and terms of sale of 5/15, n/30. What is the net amount due on the order if a partial payment of $6,000 is made on the 15th day?

Accepted Answer

The discount is 5% if paid within 15 days. The discount on $25,900 is $1,295, making the amount due $24,605. After a $6,000 payment, the remaining balance is $18,605. Since the payment was made on the 15th day, the discount applies to the remaining balance, resulting in $19,584.21 due.

Question 19

The local zoo buys hay from a supplier with an invoice amount of $17,220. The terms of the sale are 5/22, n/30. What is the net amount due on the order if the bill is paid by the 22nd day?

Accepted Answer

The terms 5/22, n/30 mean that the buyer can take a 5% discount if the invoice is paid within 22 days. To find the net amount due with the discount: $17,220 * 0.05 = $861 (discount amount). Then, $17,220 - $861 = $16,359.

Question 20

A craft shop buys stuffed animals with a list price of $8,000. If the wholesaler offers trade discounts of 25/25/25, find the net price factor.

Accepted Answer

The net price factor is calculated by multiplying the complements of the trade discounts: (1 - 0.25) * (1 - 0.25) * (1 - 0.25) = 0.75 * 0.75 * 0.75 = 0.421875, which rounds to 0.42188.

Quiz 7: Invoices, Trade Discounts, and Cash Discounts