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Morgan Company received from Lee Company an invoice dated September 27. The terms were 2/10 EOM....

Morgan Company received from Lee Company an invoice dated September 27. The terms were 2/10 EOM. The list price on the invoice was $5,000 (freight not included). Morgan receives a 9/7 chain discount. Freight charges are Morgan's responsibility, but Lee agreed to prepay the $150 freight charge. Morgan pays the invoice on November 9. What does Morgan pay, Lee? (Round your answer to 2 decimal places.)

* I kept getting 4,316.87 and shows that is wrong so please show work so I can see what I did wrong.

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Answer #1
Invoice date 27-Sep
Payment date 9-Nov
Payment days 43
Since the payment was made in 43 days, the cash discount 2/10 is not met and
hence no cash discount is given.
Now let's calculate the chain discount pricing.
Invoice price 5000
Chain discount 9/7
Selling price= Invoice price * (1- Discount-1) * (1-Discount-2)
Selling price= 5000*(1-9%)*(1-7%)
Selling price= $4,231.50
Since Freight is Morgan's responsibility, This also will be paid by Morgan to Lee
Total payable amount= 4231.50+150
Total payable amount= $4,381.50
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