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
The amount of cash received is
S.No 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
1.
Since the list price is $40,000
Also there is 2% discount if the payment made within 10 days
So,
= $40,000 x ( 1 - 2%)
= $39,200
2.
Since the payment has been made after 10 days so it should be $40,000
3.
Since the list price is $40,000
Also there is 1% discount if the payment made within 15 days
So,
= $40,000 x ( 1 - 1%)
= $39,600
4.
Since there is no discount so it should be $40,000
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