Jones Manufacturing sent Blue Company an invoice for equipment with a list price
ID: 2903370 • Letter: J
Question
Jones Manufacturing sent Blue Company an invoice for equipment with a list price of $10,000. The invoice is dated July 27 with terms of 2/10, EOM. Blue Company is entitled to a 40% trade discount. If the invoice is paid on September 5, how much does Blue pay?
Select one:
a. 9,800 dollars
b. 3,920 dollars
d. 5,880 dollars
Jones Manufacturing sent Blue Company an invoice for equipment with a list price of $10,000. The invoice is dated July 27 with terms of 2/10, EOM. Blue Company is entitled to a 40% trade discount. If the invoice is paid on September 5, how much does Blue pay? Select one: a. 9,800 dollars b. 3,920 dollars c. 6,000 dollars d. 5,880 dollarsExplanation / Answer
the answer is D
If they pay the invoice by 8/3 they would pay $5,880.00 since on top of their 40% discount they get a 2% quick pay discount. Now, if you apply the quick pay before taking of the trade discount it would be $5,800 which they would pay if paid by 8/3. If they waited to pay until 9/8 they would pay $6,000 since they didn't take advantage of the quick pay discoun
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