Please answer Q3 l. A wholesaler is offering a bread maker to retailers for S174

Question

Please answer Q3 l. A wholesaler is offering a bread maker to retailers for S174 less 16 %%, 10% and 8%. a What is the net price after all discounts? . What is the single equivalent rate of discount that was allowed? 2. Excel Builders' Supply sells a product for S1 850 less trade discounts of 15% and 8%. Jensen Building Products offers the same item for $1695 less a single trade discount of 10%, what second discount must Jensen offer to match the net price given by Excel? 3. The following invoices, all with terms 5/10, 2/30, n/60 were paid together on May 15. Invoice #104 dated March 30 is for S394.45; invoice #707 dated April 15 is for SS955, and invoice #768 dated May 10 is for $865.20. What amount was paid in total? 4. Bob's Northern Fireplaces received an invoice for S3 845 dated March 25 with terms 3/10, 1/20, n/30. The company paid S1 500 on April 4,

Explanation / Answer

Answer 3)

The indication "5/10, 2/30, n/60" (or "5/10 2/30 net 60") on the invoices represent the sales discount provided by the seller to the buyer so as to encourage prompt payment.

Here

Here all the invoices were paid on May 15.

Invoice #104 dated March 30 for $394.45

Days within which the payment was made from the invoice date = Days remaining in March + Days in April + 15 days of May

= 1 + 30 +15

= 46

Because this is greater than 30 so there won't be any discount applicable and the buyer will have to pay the full amount for this Invoice (i.e. $394.45)

Invoice #707 dated April 15 for $595.50

Days within which the payment was made from the invoice date = Days remaining in April + 15 days of May

= 15 +15

= 30

Because the payment is made within 30 days the buyer will be eligible for a 2% discount on the invoice. So, the amount paid on this invoice = $595.5 * (1 - 2%) = $583.59

Invoice #768 dated May10 for $865.20

Days within which the payment was made from the invoice date = Days between May 10 and May 15

= 15 - 10

= 5

Because the payment is made within 10 days the buyer will be eligible for a 5% discount on the invoice. So, the amount paid on this invoice = $865.20 * (1 - 5%) = $821.94

The amount paid in total = $394.45 + $583.59 + $821.94

=  $1799.98

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