Suppose a certain car manufa "selling models offers a $8,000 extra dealer incentive for eaci these venicles that the dealen As the accountant for a dealership with a number of these vehicles left in stock, your manager has asked you to calculate certain invoice figures. The normal trade discount from this car manufacturer is 17%. If the average sticker price (list price) of these remaining vehicles at your dealership is S26,500, calculate the following. (a) What is the amount of the trade discount. including the incentive (in $)? (b) What is the trade discount rate (in percent)? Round to the nearest tenth of a percent. (c) what is the net price (invoice price) to your dealership (in $)? (d) If the cars were then sold from the fleets at $1.000 over "invoice" (net price), what is the totaercentage savings to the consumer based on the list price? Round to the nearest tenth of a percent. () Although these incentive prices reflect extraordinary discounts to the consumer, what other factors should a consumer consider before purchasing a"discontinued" brand of vehicle? (Select all that apply.) O total number of vehicles manufactured this year O vehicle will be worth less than comparable models that are not discontinued O net worth of the car dealership O availability of parts and service O vehicles may be more difficult to resell

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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Transcribed Image Text:Suppose a certain car manufacturer's incentive program designed to reduce inventory of certain low-selling models offers a $8,000 extra dealer incentive for each of these vehicles that the dealer moved into its rental or service fleets. As the accountant for a dealership with a number of these vehicles left in stock, your manager has asked you to calculate certain invoice figures. The normal trade discount from this car manufacturer is 17%. If the average sticker price (list price) of these remaining vehicles at your dealership is $26,500, calculate the following. (a) What is the amount of the trade discount, including the incentive (in $)? (b) What is the trade discount rate (in percent)? Round to the nearest tenth of a percent. (c) What is the net price (invoice price) to your dealership (in $)? (d) If the cars were then sold from the fleets at $1,000 over "invoice" (net price), what is the totapercentage savings to the consumer based on the list price? Round to the nearest tenth of a percent. (e) Although these incentive prices reflect extraordinary discounts to the consumer, what other factors should a consumer consider before purchasing a "discontinued" brand of vehicle? (Select all that apply.) O total number of vehicles manufactured this year O vehicle will be worth less than comparable models that are not discontinued net worth of the car dealership O availability of parts and service vehicles may be more difficult to resell ASK YOUR TEACHER %24

Expert Solution

Step 1 (A)

AMOUNT OF THE TRADE DISCOUNT , INCLUDING THE INCENTIVE :

PARTICULATR	AMOUNT	AMOUNT
PRICE	26500
- TRADE DISCOUNT @ 17%	(4505)	4505
+ INCENTIVE SCHEME		8000
TOTAL		12505

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