Answer:
Credit Terms Date Paid Amount received
1 2/10,n/30 June 8 $39,200
2 1/10, n/30 June 15 $40,000
3 1/15, n/30 June 14 $39,600
4 n/30 June 28 $40,000
Explanation:
Sales are made on June 1 with list price $40,000
1.
June 8
The receipt is within the discount period of 10 days, so the amount received will be net of 2% discount as follow
Amount Received = $40,000 x ( 1 - 2%) = $39,200
2.
June 15
The receipt is after the discount period of 10 days, so the full amount will be received as follow
Amount Received = $40,000
3.
June 14
The receipt is within the discount period of 15 days, so the amount received will be net of 1% discount as follow
Amount Received = $40,000 x ( 1 - 1%) = $39,600
4.
June 28
There is no discount offered in this term and credit period of 30 days is given. The cash receipt is within the credit period, So the full amount will be received as follow
Amount Received = $40,000
