Angelina purchased merchandise with a list price of $6593.82. She receives a 2% cash discount and an 18/14/12 trade discount. What is Angelina’s outstanding balance if she makes a $3000 partial payment within the discount period?
Angelina purchased merchandise with a list price of $6593.82. She receives a 2% cash discount and an 18/14/12 trade discount. What is Angelina’s outstanding balance if she makes a $3000 partial payment within the discount period?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Angelina purchased merchandise with a list price of $6593.82. She receives a 2% cash discount and an 18/14/12 trade discount. What is Angelina’s outstanding balance if she makes a $3000 partial payment within the discount period?
Expert Solution
Merchandise value after trade discount
Merchandise value after trade discount = List Price x (1 - Discount) x (1 - Discount) x (1 - Discount) |
Merchandise value after trade discount = 6593.82 x (1 - 18%) x (1 - 14%) x (1 - 12%) |
Merchandise value after trade discount = 6593.82 x 0.82 x 0.86 x 0.88 |
Merchandise value after trade discount = 4091.97 |
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