Question

Adidas shipped a $80,000 sneaker order to Footlocker. The terms were 3/12, 20x, net 40. The invoice date was September 15; the receipt date was October 10 and the FOB was Footlocker’s consolidation center. Footlocker paid the invoice on October 14. The shipping cost was $134.00.

what was the discount date

what is the net payment date

how much should footlocker pay adidas?

Answer 1

	The terms were 3/12, 20x, net 40
	Above credit terms means that 3 per cent discount will be given if payment is made within 12 days, however total credit period is 40 days.
	what does 20x implies?
	20x means an extra 20 days is provided for cash discount. Means now cash discount can be availed by purchaser if payment made with in 32 days (12+20).
	In the given case,
a)	Discount date will be Sep 15 + 32 days will come out be 17th October
	Correct Answer 17th October
b)	Net payment date is October 14
c)	Amount foot locker should remit to adidas
	Invoice amount	80000
	Less: Cash discount	2400
	Net Remittance	77600