Asked by Marish Quilicot on Jun 24, 2024
Verified
Donna Pierce manages a business that distributes imported woolen fabrics. Donna's business offers a 2.5% cash discount on any amount paid within 10 days of the invoice date. On January 28, a client purchased fabrics priced at $14,500, and on February 1 the client sent in a $10,000 check. Compute the unpaid balance. (This problem involves the partial payment of an invoice within the discount period.)
Cash Discount
A deduction from the invoice price that a seller allows a buyer to encourage prompt payment.
Partial Payment
A payment that is made towards a bill or a debt that is not the full amount owed at that time.
Woolen Fabrics
Textile materials made from wool, characterized by their warmth, durability, and softness.
- Gain insight into cash discounts and their implementation on invoices.
- Ascertain the cash discount amount for early payment.
- Determine the outstanding balance on an invoice following a partial settlement within the designated discount timeframe.
Verified Answer
JL
Jeffery LouisJun 28, 2024
Final Answer :
100% 2.5% = 97.5%
$10,000 0.975 = $10,256.41
$14,500 $10,256.41 = $4,243.59 unpaid balance
$10,000 0.975 = $10,256.41
$14,500 $10,256.41 = $4,243.59 unpaid balance
Learning Objectives
- Gain insight into cash discounts and their implementation on invoices.
- Ascertain the cash discount amount for early payment.
- Determine the outstanding balance on an invoice following a partial settlement within the designated discount timeframe.