Question

A Company received an invoice for $1618 dated May 11, terms 2/15 EOM.

Answer 1

Answer:

26th of May is the last date of the discount period.

15th of June is the last date of credit period

$1600

Step-by-step explanation:

The first question say :

What is the last date of the discount period and last date of credit period?

Initially, EOM is an acronym  meaning End of Month

Now. 2/15 indicates 2%  discount of the amount to be paid must be included in the payment within 15 days after the end of the month in which invoice is issued.

• The last date of the discount period

In order for the company to be eligible for the discount, the company  must be willing to pay the invoice within the stipulated time -frame of 15 days from the date the invoice is being issued. So from 11th of May , 15 days after will be May 26th . Thus 26th of May is the last date of the discount period.

• The  last date of credit period

The last date of the credit period will be 15 days  after the end of the Month. The present month is May, so 15 days after the month of May falls at June 15. Thus, 15th of June is the last date of credit period

The second part of the question says:

• If invoice is paid on June 12, how much would the company pay? (Round your answers to the nearest hundredth)

Here , there are two things applied;

1. The date of the discount period has been passed away (i.e May 26th) but the invoice is being paid on June 12
2. The payment is done before the last date of credit period.

Thus, the company needs to pay the full amount of $1618 since the date of discount period has passed away.

Now to the nearest hundredth , we have = $1600