The amount of cash required by The Bowers Company to make the payment for the purchase of the merchandise from Saunders Corp. within the discount period of 10 days is $7,128.
- Bowers Company will enjoy a discount of $72 ($7,200 x 1%) because it is able to settle within 10 days from the date of the purchase.
- The terms of the purchase specified 1% discount if payment is made within 10 days and full settlement within 30 days.
Data Analysis and Calculations:
Debit Inventory $9,100 Credit Accounts Payable (Sanders Corp.) $9,100
Trade terms = 1/10, n/30
Debit Accounts Payable (Sanders Corp.) $1,900 Credit Inventory $1,900
Debit Accounts Payable (Sanders Corp.) $7,200 ($9,100 - $1,900) Credit Cash $7,128 ($7,200 - $72) Credit Cash Discounts $72 ($7,200 x 1%)
Thus, the credit period expires after 30 days and the cash required for the payment is $7,128 if the discount window of 10 days is utilized.
Learn more about cash discounts at brainly.com/question/20041802
