Answer: a) $30,400
b)$10,394
c)$16,830
d)$8,015
e)$76,626
Explanation:
When a credit term such as 2/10, n/30 is given, it means that the buyer is liable for a 2% discount if they pay within 10 days otherwise they must pay within 30 days.
Discounts are applied AFTER returns are subtracted.
Also any freight charges are charged to the buyer.
With that said, let's calculate this with gusto
a) No discount. Returns of $1,600
= 32,000 - 1,600
= $30,400 is amount to be paid.
b) Freight charges of $300. 2% discount. Returns of $2,500
= (1-0.02)*(12,800 - 2500) + 300
= $10,394 is amount to be paid.
c)Discount of 1%. Returns of $4,000.
= (21,000-4000) * ( 1 - 0.01)
= $16,830 is amount to be paid.
d) Freight charges of $175. Returns of $1,000 and discount of 2%.
= (9,000 - 1,000) * (1 - 0.02) + 175
= $8,015 is amount to be paid.
e) Discount of 1%. No returns.
= 77,400 ( 1 - 0.01)
= $76,626 is amount to be paid.
