Question

An invoice for $6000 dated September 1 with terms 2/10, 1½/20, n/30 is received in the mail on September 3^rd. A payment of $3000 is made on September 12^th. What is the outstanding balance?

  

Select one:

a. 3000

b. 2955

c. 2940

d. 3060

e. 3045

Answer 1

Ans: B) $ 2,955

Explanation:

1) Bill is dated for september 1.

2) Term is: 2/10, 1½/20, n/30

3) This means,

a cash discount of 2% for amounts paid within 10 days of the invoice date and a cash discount of 1 1/2% for amounts paid between 11 and 20 days after the invoice date. And the invoice is due to be paid in full within 30 days.

4) Amount is paid on 12th sep.i.e after 10 days so no cash discount is given.

5) Amount paid between 11th to 20th days= $ 3000

6) Discount: 1 1/2% ×3000 % =$45

7) Total Payment to be made after discount:

= $ 6000 - $45

= $5,955

8) Outstanding Balance:

=$5,955 - $ 3000

=$ 2,955