+67 City Cellular purchased $28,900 in cell phones on April 25. The terms of sale were 4/20, 3/30, n/60. Freight terms were F.O.B. destination. Returned goods amounted to $650.
a. What is the net amount due if City Cellular sends the manufacturer a partial payment of $5,000 on May 20?
$
b. What is the net date?
Use the full name of the month (e.g., April).
c. If the manufacturer charges a 4 1/2% late fee, how much would City Cellular owe if it did not pay the balance by the net date?
$
+394 Business maths (unlike finance) are not too difficult once you learn the terms and how to apply the related maths.
a) A 3% discount applies because it is paid within 30 days.
The Net amount due = net price - partial payment credit
Net amount = 28900 - 650 (Returned goods)= $28,250 (5000/0.97) reflects 3% discount
Net amount = 28250 - 5154.64
Net amount due = $23,745
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b) n/60 is the net date. It is 60 days from April 25 and that is June 24.
To conveniently count the days, you can use excel spread sheet or this link
www.timeanddate.com/date/dateadd.html
Or do it in your head – it’s not difficult.
c) Simply add 4.5% to the net amount owed.
28900 - 650 (Returned goods)= 28,250 + (0.045*28250) = $29,521.25 (Late fee=1271.25).
_7UP_
+394 Business maths (unlike finance) are not too difficult once you learn the terms and how to apply the related maths.
a) A 3% discount applies because it is paid within 30 days.
The Net amount due = net price - partial payment credit
Net amount = 28900 - 650 (Returned goods)= $28,250 (5000/0.97) reflects 3% discount
Net amount = 28250 - 5154.64
Net amount due = $23,745
----
b) n/60 is the net date. It is 60 days from April 25 and that is June 24.
To conveniently count the days, you can use excel spread sheet or this link
www.timeanddate.com/date/dateadd.html
Or do it in your head – it’s not difficult.
c) Simply add 4.5% to the net amount owed.
28900 - 650 (Returned goods)= 28,250 + (0.045*28250) = $29,521.25 (Late fee=1271.25).
_7UP_
