Bally Manufacturing sent Intel Corporation an invoice for machinery with a $13,7

Question

Bally Manufacturing sent Intel Corporation an invoice for machinery with a $13,700 list price. Bally dated the invoice July 26 with 5/10 EOM terms. Intel receives a 20% trade discount. Intel pays the invoice on August 08. On August 1, Intel Corporation returns $400 of the machinery due to defects. What does Intel pay Bally on August 08?

Bally Manufacturing sent Intel Corporation an invoice for machinery with a $13,700 list price. Bally dated the invoice July 26 with 5/10 EOM terms. Intel receives a 20% trade discount. Intel pays the invoice on August 08. On August 1, Intel Corporation returns $400 of the machinery due to defects. What does Intel pay Bally on August 08?

Explanation / Answer

Hi,

Please find the detailed answer as follows:

Gross Value of the Invoice = 13700

Less Trade Discount (20%) = 2740

Net Value Payable After Trade Discount = 13700 - 2740 = 10960

Less Value of Goods Returned on 1st August = 400

Net Value after Adjustment for Returns = 10560

Since, the payment is made after 10 days from the date of invoice, Intel cannot claim 5% additional discount (as mentioned in 5/10 EOM terms), the final amount that would be paid will be $10560 only.

Answer is $10560.

Thanks.

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.