Question

On May 31, Talbots of Boston sold Forrest of Los Angeles $7,850 of fine clothes. Terms were 4/10 EOM FOB Boston. Talbots agreed to prepay the $95 freight. a. If Forrest pays the invoice on June 8, what will Forrest pay? Amount paid $ b. If Forrest pays on July 24, what will Forrest pay? Amount paid $

Answer 1

A. If Forrest pays the invoice on June 8, what will Forrest pay?
4/10 EOM means forrest gets a 4% discount if they pay within 10 days after the end of the month. They only have to pay $7536 if they pay before June 8th
Discount	=7850*4/100
	$                314.00
Amount paid	=7850-314
	$             7,536.00
B.If Forrest pays on July 24, what will Forrest pay?
If they pay on july 24 20, they do not get the 4% discount so they pay the full $7850
Amount Paid $7850