A large retailer obtains merchandise under the credit terms of 1/15, net 45, but routinely takes 60 days to pay its bills. Use a 365-day year. a). What is the retailer's effective cost of trade credit?

A large retailer obtains merchandise under the credit terms of 1/15, net 45, but routinely takes 60 days to pay its bills. Use a 365-day year. a). What is the retailer's effective cost of trade credit?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 4P: A large retailer obtains merchandise under the credit terms of 1/15, net 45, but routinely takes 60...

See similar textbooks

Related questions

Q: Please provide correct answer general accounting

A: Step 1: Define InvestmentInvesting is the choices investors make on which investment opportunities…

Q: Assume that social security taxes provide answer general accounting

A: Step 1: Define Employer Payroll TaxEmployer payroll tax is an expense that a company incurs that is…

Q: answer?

A: Explanation of Days Sales Outstanding (DSO): Days Sales Outstanding is a financial metric that…

Q: solution?

A: Explanation of Basket Purchase Transactions: A basket purchase transaction occurs when multiple…

Q: Provide correct answer with explanation

A: Explanation of Evolution Creates Problems:Evolution in accounting refers to the changes and…

Q: Ivanhoe Distribution Co. has determined its December 31, 2017 inventory on a LIFO basis at $890,000.…

A: Step 1: Understand the Lower-of-Cost-or-Market RuleUnder the LCM rule, inventory is valued at the…

Q: The Heating Division of Kobe International produces a heating element that it sells to its customers…

A: Step 1: Understand the Transfer Pricing ConceptThe minimum transfer price is the lowest price the…

Q: SOLVE

A: Explanation of Cost of the Machine:The cost of the machine refers to the total expenditure incurred…

Q: Financial Accounting Question please do fast and step by step calculation

A: Step 1: Define Capital Structure WeightsThe capital structure weights of capital sources are…

Q: Financial accounting Question

A: Explanation of Stakeholder Impact Analysis: Stakeholder impact analysis is a systematic process of…

Q: Hi solve this.

A: The manufacturing margin under variable costing is calculated as the sales revenue minus the total…

Q: Problem

A: Explanation of Debt-to-Equity Ratio: The debt-to-equity ratio is a key financial metric that…

Q: Given answer accounting questions

A: Step 1: Define Material VarianceMaterial variance includes material price and quantity variance.…

Q: Both MCQ's answer want.

A: Step 1: Understanding Dollar-Value LIFOUnder the DVL method, inventory is valued at base-year costs…

Q: I need general accounting question answer

A: Step 1: Define Price-Earnings RatioThe price to earnings ratio is the ratio of the market price per…

Q: Jones electronic solutions this accounting questions

A: Step 1:First, calculate the total value of equity: Value of equity = Number of shares outstanding *…

Q: Hello all expert answer this general account question.

A: Key Concepts and DefinitionsPassive Income or Loss:Passive income is generally derived from rental…

Q: Subject :- General Account

A: To determine the minimum price at which producing and selling the product becomes profitable, we…

Q: What is your total return for last year on these financial accounting question?

A: Step 1: Define Overall Returns on StocksThe total returns on stocks can be bifurcated into dividend…

Q: The COGS for January was__.

A: Explanation of Cost of Goods Sold (COGS): Cost of goods sold represents the direct cost of…

Q: I need answer of this question solution general accounting

A: Step 1: Define Sales RevenueA sales revenue is the sale of goods or rendering of services in the…

Q: Sandhill Industries, Inc. reports the following liabilities (in thousands) on its January 31, 2025…

A: Step 1:The total liabilities are divided into two parts, i.e., current liabilities and long-term…

Q: Solve it ASAP in Short

A: Step 1: Start with pretax financial income provided in the problem.Step 2: Adjust for depreciation…

Q: Glenwood corporation has the following sokve this accounting questions

A: Step 1: Define Debt-to-Equity RatioThe debt-to-equity ratio measures a company's financial leverage…

Q: What is the dollar amount of taxes paid on these financial accounting question?

A: Step 1: Define TaxesTaxes are the amount that a business or individual has to pay to the government…

Q: Provide this general account answer

A: Step 1: Calculate the Contribution Margin for Each ProductThe contribution margin is calculated as:…

Q: Please provide correct answer financial accounting not use chart gpt

A: Step 1: Define Interest RateThe percentage of interest that a lender charges a borrower on the…

Q: Activity based costing

A: Step 1:Under activity-based costing, the activity rate is calculated by dividing the total activity…

Q: Hy expert give me correct answer

A: Step 1: Define Cost of Goods SoldSome quantity may be sold to customers of the total goods…

Q: Financial accounting

A: Step 1: Define MarkupThe concept of markup, in business and economics, is the amount of money that…

Q: Please given answer general accounting

A: Step 1: Define Notes ReceivableDebts owed by customers to the company are referred to as notes…

Q: General Account

A: To determine the ending merchandise inventory under the lower-of-cost-or-market (LCM) rule, we…

Q: PROBLEM 12-23 Close or Retain a Store [LO2] Thrifty Markets, Inc., operates three stores in a large…

A: 1. Revenues:The Downtown Store's sales revenue of $600,000 will be lost if the store…

Q: Subject = Financial Account Urban Company reports the following information regarding its production…

A: Compute the production cost per unit under variable costing, we include all variable costs (direct…

Q: Financial accounting

A: Step 1: Introduction to time value of moneyTime value of money is a financial concept which is used…

Q: Hi expert please give me answer general accounting

A: Step 1: Define Accounting EquationThe balance sheet shows the changes in the accounting equation…

Q: None

A: Operating leverage measures how a company's operating income reacts to changes in sales. It shows…

Q: I Need Answer

A: Explanation of Contribution Margin Ratio: The contribution margin ratio is a crucial financial…

Q: Subject:- General Account Use the following data: Beginning inventory in units Units produced Units…

A: Given DataBeginning Inventory: 0 unitsUnits Produced: 4,800 unitsUnits Sold: 4,000 unitsSales…

Q: I don't need ai answer accounting questions

A: 1% for 45 days needs to be converted to annual rate (365 days)Formula = (Discount % × 365) / (Days…

Q: Financial accounting

A: Step 1: Define Convertible BondsA convertible bond is a debenture that can be exchanged for several…

Q: Exercise 30-12 (Algorithmic) (LO. 1) The entity reports the following transactions for the 2023 tax…

A: Step 1: Gross IncomeLet's first calculate the gross income:Operating income from a business:…

Q: Do you please give me correct answer the general accounting question

A: Step 1: Define Units of Production MethodThe units of the production method of depreciation are used…

Q: Please give me answer general accounting

A: Step 1: Calculate the Predetermined Overhead RateThe predetermined overhead rate (POHR) is based on…

Q: Posting in General Account

A: **Step 1: Define the total cost function**Total cost = Fixed cost + (Variable cost per unit ×…

Q: Prblm

A: Explanation of Critical Definition:The "Critical" classification is applied to processes or tests…

Q: Hi expert of account answer me

A: c. Road use would be rationed to drivers who benefit from it the mostWhen a toll is placed on a…

Q: Please need answer the general accounting question without use Ai and chatgpt

A: Step 1: Define Interest on Note ReceivableThe note receivable is a current asset held by a firm…

Q: Solve

A: Q1. When should cross-dimensional analysis replace single-focus review?Cross-dimensional analysis is…

Q: Subject:- General Account Waterway Frame Camera Shop uses the lower-of-cost-or-net realizable value…

A: Calculation for Ending Inventory Using LCNRV (Lower of Cost or Net Realizable Value):The…

Question

None

A large retailer obtains merchandise under
the credit terms of 1/15, net 45, but routinely
takes 60 days to pay its bills. Use a 365-day
year.
a). What is the retailer's effective cost of trade
credit?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Similar questions

If a retailer purchased inventory in the amount of $750, terms 2/10, n/60, returned $30 of the inventory for a full refund, and received an allowance for $95, how much would the discount be if the retailer remitted payment within the discount window?
If a customer purchased merchandise in the amount of $340, terms 3/10, n/30, returned $70 of the inventory for a full refund, and received an allowance for $65, how much discount would be applied if the customer remitted payment within the discount window?
Please provide the answer
I don't need ai answer accounting questions
Assume the following information: merchandise is sold on account to customer for P120,000, FOB Shipping Point, 2/10, n/30. The seller paid transportation cost of P6,000. What is the amount of remittance due within the discount period?
A large retailer obtains merchandise under the credit terms of 1/10, net 30, but routinely takes 60 dyas to pay its bills.(Because the retailer is an important customer, suppliers allow the firsm to stretch its credit terms.) What is the retailers effective cost of trade credit?
if merchandise is sold on account to a customer for 1,000 terms fob shipping point 1/10, n/30, and the seller prepays $50 in freight, the amount of the discount for early payment would be?
If merchandise is sold on account to a customer for 1000 terms FOB shipping point, 1/10, n/30 and the seller prepays $50 in transportation costs, the amount of the discount for early payment would be:
A company purchases merchandise with a catalog price of $24,500. The company receives a 35% trade discount from the seller. The seller also offers credit terms of 2/10, n/30. Assuming no returns were made and that payment was made within the discount period, what is the net cost of the merchandise?
Merchandise invoiced at $8,900 is sold on terms 1/10, n/30. If the buyer pays within the discount period, what amount will be reported on the income statement as net sales?
A retailer purchases some merchandise with an invoice price of $19,700 and terms of sale of 5/15, n/45. What is the net amount due (in $) on the order if a partial payment of $10,800 is made on the 15th day? (Round your answer to the nearest cent.)
Please answer the question correctly. Thank you.