A retailer buys merchandise from a supplier with an invoice amount of $12,800. The terms of the sale are 6/20, n/30. What is the net amount due (in $) on the order if the bill is paid by the 20th day? $ 12,672

A retailer buys merchandise from a supplier with an invoice amount of $12,800. The terms of the sale are 6/20, n/30. What is the net amount due (in $) on the order if the bill is paid by the 20th day? $ 12,672

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A retailer buys merchandise from a supplier with an invoice amount of
$12,800. The terms of the sale are 6/20, n/30. What is the net amount due
(in $) on the order if the bill is paid by the 20th day?
$ 12,672
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Expert Solution

Step 1

6/20 net 30 means that 6 percent discount will be given if payment is made with in 20 days and no discount will be given if payment is made after 20^th day but before 30^th day.

Last date of payment is 30^th day from the date of purcase.

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