Q. FINANCIAL ACCOUNTING 3 POINTS Northern Traders allows 2% cashdiscount if payment is made within 10days. Invoice amount is $40,000. Statethe amount of discount available.

Explanation of Cash Discount: A cash discount is a reduction in the amount owed by a customer if…

Answered: Northern Traders allows 2% cash…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 17P

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PLEASE SHOW ALL WORK 6. You receive an invoice for $18,300 with terms of 5/15, n/60. If the supplier has a policy of allowing a cash discount for partial payments and you pay $11,500 within the discount period, calculate the amount of credit you will receive for this payment.Amount credited = Amount paidComplement of cash discount rate = $11,500 7. For terms of 8/10, n/60 determine the annual rate you, in effect, pay the supplier if you fail to pay the invoice at the end of the discount period. Express the rate with 2 decimal places. 8. An invoice for $75.20 has terms of 3/10, 1/30, n/60. If you make payment 25 days after the invoice date, what amount should you pay? 9. You purchase goods on an invoice dated July 5 with terms of 4/15, n/45 ROG. If you receive the goods on July 23, calculate(a) the last day of the discount period, and (b) the last day of the credit period.b. Last day of credit period:
What does "2/10" mean, with respect to "credit terms of 2/10, n/30"? OA. Interest of 2 percent will be charged if the invoice is paid after 10 days from the date on the invoice. OB. A discount of 2 percent will be allowed if the invoice is paid within 10 days of the invoice date. OC. A discount of 10 percent will be allowed if the invoice is paid within two days of the invoice date. OD. Interest of 10 percent will be charged if invoice is paid after two days.
You receive an invoice for $17,400 with terms of 3/15, n/60. The supplier has a policy of allowing a cash discount for partial payments and you pay $8,000 within the discount period. Calculate the amount of credit you will receive for this payment.
Assume that you start with a balance of $3900 on your credit card.During the first month you charge $400. During the second month you charge $650 and make a payment of $280. Assume that your credit card charges a 29% APR and each month you make the minimum payment of 2.5% of the balance. Complete the following table. Round your answer to the nearest cent. Month 1 Previous balance- $3900 Finance charge- $94.25 Purchase- 400 Payment ?97.50 New balance? Month 2 Previous balance- finance charge- purchase- payments- New balance
A supplier offers credit terms of 2/10, net 30, meaning a 2% discount is available if payment is made within 10 days. If a company purchases $12,000 worth of goods and pays within 7 days, calculate the amount paid after applying the discount.
Kumi Ltd permits its customers to pay with a credit card or to receive a percentage discount x for paying cash. For credit card purchases, the companyreceives 97% of the purchase price one-half month later. Determine the value of x that would make the two payment methods equivalentif the company’s annual rate of return is 14%.
You have a credit card with an APR (Annual Percentage Rate) of 12%. You begin with a balance of $200, in response to which you make a payment of $75. The first month you make charges amounting to $50. You make a payment of $75 to reduce the new balance, and the second month you charge $60. Previous balances, payments and purchases for the months 1 and 2 are given in the table below: Month Previous Balance Payment Purchases Finance Charge New Balance 1 $200 $75 $50 a:$ b:$ 2 $ $75 $60 c:$ d:$
What does "2/10" mean, with respect to "credit terms of 2/10, n/30"? A. A discount of 2 percent will be allowed if the invoice is paid within 10 days of the invoice date. B. Interest of 2 percent will be charged if the invoice is paid after 10 days from the date on the invoice. C. A discount of 10 percent will be allowed if the invoice is paid within two days of the invoice date. D. Interest of 10 percent will be charged if invoice is paid after two days.
A supplier grants credit terms of 1/5, net 30. What is the effective annual rate of the discount on a purchase of $5,000?
A company receiving payment of a $20,000 accounts receivable within 10 days with terms of 2/10, n/30, would record a sales discount of: Ca. 2% of $20,000 Ob. (100% -2%) x $20,000 Oc. (100 % - 10%) x $20,000 Od. 10% of $20,000
A 90-day, 10% note for $10,000 dated March 15 is received from a customer on account. The face value of the note is: Oa. $10,250. Ob. $9,000. Oc. $9,750. Od. $10,000.
A $10,000 credit supply has the following terms: trade terms are 5/5 net 50, interest rate 8%. What is the amount to pay if the buyer will take the discount and pay on the 5th day of the invoice? A. -14.234 B. -14,250 C. -14.260 D. -14,230

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Northern Traders allows 2% cash discount if payment is made within 10 days. Invoice amount is $40,000. State the amount of discount available.