INTERMEDIATE ACCOUNTING-NEXTGEN ACCESS
17th Edition
ISBN: 9781119659747
Author: Kieso
Publisher: WILEY
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Please provide the correct answer to this general accounting problem using accurate calculations.
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Cost of Trade Credit
A large retailer obtains merchandise under the credit terms of 3/20, net 35, but routinely takes 65 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's effective cost of trade credit? Assume a 365-day year. Do not round intermediate calculations. Round your answer to two decimal places. 25.10 is incorrect.
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