$12,000 arrived on Sept. 26, w/ terms 3/7, 2/30, n/60. A second for $93,000 arrived on Sept. 29, w/ terms 5/7, 1/30, n/60. You paid $10,000 on Oct. 1. How much do you have to pay today to settle the invoices

$12,000 arrived on Sept. 26, w/ terms 3/7, 2/30, n/60. A second for $93,000 arrived on Sept. 29, w/ terms 5/7, 1/30, n/60. You paid $10,000 on Oct. 1. How much do you have to pay today to settle the invoices

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

An invoice for $12,000 arrived on Sept. 26, w/ terms 3/7, 2/30, n/60. A second
invoice for $93,000 arrived on Sept. 29, w/ terms 5/7, 1/30, n/60. You paid
$10,000 on Oct. 1. How much do you have to pay today to settle the invoices?

Expert Solution

Step 1

First Invoice on Sept. 26 = 12,000

Discount: If paid till Oct. 3, then 3%

If paid till Oct. 25, then 2%

Amount paid on Oct. 1 = 10,000

Assumed that, amount paid from first invoice

Second Invoice on Sept. 29 = 93,000

Discount: If paid till Oct. 6, then 5%

If paid till Oct. 28, then 1%

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